Restaurant Management Essay, Research Paper

INTRODUCTION

One of the oldest and most prominent problems in the restaurant industry is employee turnover. “With annual turnover rates reaching 300%, apparently the foodservice industry’s problem is not finding employees, it’s keeping them” (Weinstein, 1992, [online]). The manager is the essential element to running a successful independent restaurant. In my eyes, a successful restaurant goes beyond the financial spectrum. I believe successful, in this sense, is defined as employing and retaining happy employees who are motivated to work. “A happy employee makes a happy customer” (Strauss, 1999, [online]). When customers are pleased with the service they receive when dining out, they are more inclined to return and tell their friends about the good experience they had. The manager is the source in keeping her employees smiling because she is responsible for setting the morale and the tone inside the establishment. “From restaurant to restaurant, the leading reason for crew turnover is an adversarial relationship with management” (Weinstein, 1992, [online]). My main focus for this paper is front-of-the-house restaurant employees. I define front-of-the-house employees as servers, bar backs and bartenders. If a manager wants to prevent her employees from quitting she must keep them happy and in order to do that she must focus on what the employee wants. Combining my personal experience with the data that I researched, I have written this report on the two most important standards that I feel a restaurant manager must enact to keep her employees turnover to a

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minimum. The two criteria that I feel a manager must follow in order to successfully retain her smiling quality employees are employee incentives and training. This report was written in five weeks using the following data: two personal interviews, online information and books.

HISTORY

I’ve had personal experience in the restaurant business for eleven years. In that time I have worked in seven different restaurants. The managers that ran these establishments had very diverse managerial styles. Their managerial styles ranged from the employees running the place to the management acting like they were the restaurant police. According to Robert Plotkin, “NO ONE CAN MAKE OR (sic) break a place like the manager” (2000, [online]). None of the different supervision tactics that I have worked under seemed to help keep employee turnover down. The majority of the individually owned restaurants that I am familiar with are run and managed by the owners themselves.

Employee Incentives

As a restaurant employee I feel that servers and bartenders need more of an incentive to be employer loyal than just making tips. Cash is not enough of a motivational factor for employees to not leave one institution to work for

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another. Restaurants that implement incentive programs tend to have employee turnover rates that are lower than the national average. When I state incentive programs I’m talking about employee health benefits, and reward strategies. Restaurants such as Chevy’s and Chi-Chi’s continually develop benefit and incentive programs, that help make their turnover rates the envy of the industry (Weinstein, 1992, [online]).

Employee Benefits

If a supervisor offered her employees health benefits her employee retention rate would increase dramatically. Among the perks at Chi-Chi’s restaurant is medical insurance for part-timers who work at least 20 hours a week. “A lot of part-time employees stay with us because of the medical benefits,” says Talarico, vice president of training and development for Chi-Chi’s, Louisville, Ky (Weinstein, 1992, [online]). I spoke with Marc Uelmen the manager of Mongolian BBQ in Ann Arbor, Michigan and he said, “because Mongolian offers our employees medical and dental we are able to keep our employees from leaving and going to work at another restaurant” (Uelmen, Interview).

I believe that a manager should offer health benefits to all her employees that work on average at least 20 hours a week. Of the several different establishments I have worked at in restaurant career only one of them offered

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employee health benefits. Employee incentives like health insurance not only keeps employee turnover down but it would also make employees more productive. More productive employees provide better customer service so it would inevitably mean more money for the business.

The real challenge we face today is not finding new people; it’s keeping the best ones we already have and making sure that they’re feeling happy, challenged, fulfilled and excited about the work we ask them to do. Doing that maximizes retention. Maximizing retention minimizes turnover. The lower the turnover, the better the service and the higher the profits (Sullivan, 2000, [online]).

Individually owned restaurants are renown for not granting employees vacation pay or paid sick time. This has been my biggest complaint at every restaurant I have been employed at. When I take a vacation I don’t only have to save money for the vacation but also for the time I will miss at work. When I am sick I force myself to go into work because I cannot afford to miss a shift. I believe that when a weak body is forced to do a strenuous physical activity such as waiting tables it inevitably only makes the immune system weaker and it takes the body longer to recover.

Many larger restaurant corporations do offer employees monetary advantages such as vacation and sick pay. If managers of independently owned restaurants would realize that offering such simple financial assistance

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to their staff would help to keep them on board longer I believe they could improve their retention rates.

I spoke with Doug Schrock the manager of the Hamlin Pub in Lake Orion, Michigan and he said that lately he has been losing a lot of his good employees to chain restaurants. In order to prevent losing anymore of his good employees he decided to start offering vacation pay to his front-of-the-house employees. In order for his employees to be eligible for one week’s worth of vacation pay they must be on his payroll consistently for one year. Employees that have been with the company for three years or more will receive two weeks worth of pay. Doug said that they must take the vacation in order to receive the money. He said that the biggest problem with giving a paid vacation to his servers and bartenders is that their primary income is fed through their tips not their hourly wage. Legally the employer only has to pay tipped employees $2.65 an hour. Doug said that in order to encourage his front-of-the-house employees to claim all of their earned tips he bases their vacation pay on their average weekly claimed income. He also told me that granting sick pay to any of his tipped employees is out of the question because he feels that it encourages people to call in sick even when they aren’t because they still get paid. I told him, “well one out of two isn’t bad” (Schrock, Interview).

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Reward Strategies

A brilliant way for managers to keep the good employees that they have is rewarding them. Award programs are the most popular form of motivation and recognition today (Weinstein, 1992, [online]). When employees are compensated for a job well done they feel like they are appreciated and respected and employee gratitude leads to lower employee churn. The bottom line is that employee recognition is the yin and yang of lower turnover (Sullivan, 2000, [online]).

One of the most important praise programs that I think is crucial in any business is the employee referral program. With this type of program it would be a win/win situation for the employee and for the supervisor. The structure that I believe should be used for the referral program would be set up as follows: one of the restaurant employees would suggest hiring someone they know, who is known to be a good employee, to the manager. If she hires the referred person and they stay for ninety days than the employee who recommended the new hire would be rewarded with a $75 bonus. “Remember that good people know good people”(Sullivan, 2000, [online]).

The second appreciation strategy that should be instituted within any successful restaurant is employee of the year. How the employee of the year is chosen would be the manager’s discretion. The employee of the year would be

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rewarded with a free all expensive paid one-week trip to wherever the supervisor decides. Bonuses can be very effective motivators for employees if they are related to their reason for working (Miller and Porter, 1985, P.234).

Training

Most restaurants that I have worked in did not have sufficient training programs. One out of every three new hires quit, after only a couple of days on the job as a result of not being properly trained to handle dealing with customers in a fast paced environment. When I asked Doug about his lack of training program at the Hamlin Pub he explained to me that it is cheaper for the establishment to not train a new employee rather than train a new hire efficiently (Schrock, Interview). When a restaurant does not provide a training program for new employees the customer is essentially used as the training tool. “A lot of restaurants throw in new employees to sink or swim,” Thompson says (Zuber, 1996, [online]). If a customer is not satisfied with the service at a restaurant they will just go somewhere else where they will be properly taken care of so don’t ever have your staff practice on the customer (Sullivan, 1999, [online]). When the customer is used as a tool for employee training, whether managers believe it or not, the restaurant is paying. On the

company books it might read that it costs the company an exuberant amount to train new employees, but what the books can’t keep track of are all the