SHOULD RESTAURANTS OFFER COOKS MERIT PAY?

Painted in Waterlogue

Compensation is not the only motivator, but it is pretty close to the top of the motivational food chain. Turnover of employees in restaurants of all types is much higher than the norm. Although there are many reasons for turnover, monetary needs seem to be a common factor.

“The overall annual turnover rate in restaurants and hotels was 62.6% in 2013, compared with 42.2% average in other industry sectors.”

The National Restaurant Association – Bruce Grindy- Economist, March 2014

Now, in all fairness, a portion of this attrition is due to the seasonal nature of the hospitality business and the need to have a steady flow of part-time, seasonal employees, yet we all know that there are many, full-time staff members who leave for better opportunities elsewhere.

What are most distressing about this data are the tangible and intangible costs associated with turnover. On the tangible side, it costs time and money going through the search, interview, orientation, and training period for new employees. The intangibles, however, are even more significant:

[]         Stress on the team dynamic

[]         Loss of product consistency

[]         Impact on the restaurant brand while they recover from staff attrition

What do great employees contribute to your restaurants success? How does a restaurant equate value to the intangible contributions?

Note the following partial list of intangibles that great employees bring to a restaurant:

[] Trust and dependability

[] Team esprit de corps

[] A passion for their work

[] A commitment to quality

[] A commitment to consistency

[] Unique talents

Although it is difficult to quantify the importance of these contributions, chefs and restaurateurs understand that they are significant. These contributions give a restaurant its personality and in turn, staying power.

Great restaurants do not appear simply because of location, a beautiful physical plant, or even a well-designed menu. Restaurants mature and become significant because of the people who work and contribute as team members. All of the aforementioned intangibles are the difference between a good and a great restaurant. The difference between a restaurant struggling to survive and one that is financially strong.

When valuable team members leave, the restaurant loses part of its soul, a part that is very difficult to recover.

Painted in WaterlogueSo, how do we recognize and reward these employees – a restaurants most important asset? Will higher rates of pay make a difference? Yes, in the short-term, a pay increase does help, however, the restaurant needs to build a program that encourages long-term loyalty among exceptional staff members. This leads to the concept of merit.

Merit rewards can be remarkable incentives if the restaurant builds a sense of ownership or “intrapreneurship” among employees. People remain loyal and enthused about employers that treat them as partners rather than just staff.

Here are some intrapreneur/partner ideas for great employee retention”

[] Set a program of employee contribution planning (goal setting). Require staff members to map out how they will help the business to grow, improve, control costs, and improve its brand, etc. in a year. Ask these same employees, at the end of the year or period to summarize how well they did with their goals. Depending on their level of success, reward them with an appropriate bonus.

[] Require your employees to self-evaluate at the end of each year, rather than simply rely on the supervisor’s assessment. You will find that most employees are harder on themselves than those who supervise them.

[] Share your success. If the restaurant does well, then bonus checks could follow. This helps to encourage everyone to be on top of his or her game, always.

[] Set up a company 401K and contribute even a small amount so that great employees can see your commitment to their future. (Restaurant people rarely plan for their future without a push from others)

[] Offer direct deposit to both staff checking accounts, but also credit unions for savings.

[] Offer some reimbursement for staff members who continue their education.

[] Cover the cost of staff membership in professional organizations.

With recent discussions about eliminating gratuities for service staff and increasing front-of-the-house base pay, it might be prudent to re-assess the entire compensation model and reward structure in restaurants.

PLAN BETTER – TRAIN HARDER

Harvest America Ventures, LLC

www.harvestamericaventures.com

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  4 comments for “SHOULD RESTAURANTS OFFER COOKS MERIT PAY?

  1. January 31, 2015 at 5:51 pm

    Reblogged this on Whatever, just cook. and commented:
    Love this blog. Spot on every time.

  2. frank novak
    January 31, 2015 at 9:43 pm

    I agree with everything stated in the blog. I found a great amount of kitchen turnover is due to burnout. Not everybody leaves for a better position. More money and a sense of belonging, plus the feeling you are actually sharing in the wealth generated by your labor goes a long way. But the long hour and grueling schedules that have you working nights, holidays, and weekends without any hope of enjoying a semblance of a normal life is mind numbing. I always thought if you could schedule a staff with planned time off that allowed for the cook to take advantage of some “normal days off” you would be offering them a valuable benefit.

    • Ryan
      February 7, 2015 at 3:15 pm

      No I dont agree , you get a check that provides food and shelter for your family you get insurance!
      a Uniform and a chance to develop your skills .. yeah it sounds nice , but come on really based on merrit no way , most kitchens reward good cooks with more hours longer shifts , and o.t. when its available .

    • February 25, 2015 at 5:04 pm

      So true Frank. When I created our newest concept, one of my main goals was to represent “quality of life” not only for myself, but, for all of the team members. Commitment to being closed for two days a week gave them their own weekend to enjoy (except during seasonal business spikes) and it gave my business the presence of our A-Team all the time. This way I could assure above average salaries because my best staff was in every day that we are open…and our customers never questioned the perceived value, cost or intangible attention to detail that remained consistent with a staff that is happy and productive on so many levels. Some would say that it is too risky or that they are leaving money on the table…I disagree and things continue to go well for us in our fourth year!

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