Restaurant Decision Making Case Study
Decision Making Case Study Help
Introduction
The main aim of this essay is to identify the issue of low employee retention rate in the local Asian restaurant named Spice Temple opened in Blight Street, New South Wales, Australia. This essay will mainly outline the issue of employee turnover while outlining various solutions and solving the problem by application of different decision making process tools. Spice Temple is a Chinese restaurant where regional Chinese dishes are served in an intimated atmosphere however the restaurant is finding it difficult in retaining the chefs and waiters that know Chinese language. Due to high turnover rate, the restaurant is currently facing low customer satisfaction level.
Problem Background
The higher level of turnover of full-time employees is associated with lower customer satisfaction rates, speed of service and friendliness. Employee turnover creates the extra costs including recruitment costs and disruption in the operations and other negative consequences to the restaurants’ performance (Tapola, 2016). It is to be noted that the employees play a vital role when it comes to the overall quality of the service. However, Spice Temple is facing the problem of high turnover from past 8 months. The employees (especially chefs) are leaving the restaurant after every 2 months after getting trained on how to cook various authentic Chinese dishes. According to Liu (2014), higher employee turnover rates decrease the productivity; increase the costs and leads to loss in profits and revenue. Kacmar et al. (2006) also found out that higher rates of employee turnover in restaurants can lead to increased waiting time of order and food wastage. Moreover, it was also found that it takes twice the employee’s salary of finding and training the new employee after one employee leaves. In the case of Spice Temple, the manager is responsible for taking effective steps for solving the problem.
Problem Definition
Employee turnover is the rate at which employees leave the company either voluntarily or involuntarily by the company. Turnover rate is calculated by dividing the total number of employees leaving the company by the average number of employees recruited in the company in previous year or month. There is an ample evidence of lower levels of customer satisfaction caused by higher levels of employee turnover (Hurley, 2015). According to Lashley (2001), the turnover costs can be either direct or indirect. The direct costs include replacement of the former employees and the indirect costs are associated with lost customers and forgone revenue. Training cots can also be considered as both direct and indirect as it requires the restaurant to pay for the courses and material included in training the employees.
High employee turnover rate is a structured problem that is faced by the organizations all around the world (Lashley, 2001). It is considered to be a straight forward problem that can be determined and solved by testing and implementation of solutions. The structured problems in the restaurant industry involve the service speed and customer ratings (Liu, 2014). The higher employee turnover might result in lower speed of service i.e. time taken for a customer to get their food after placing their order. This might result in lower customer satisfaction rate and higher customer complaint rates.
Solution Generation
The manager at Spice Temple must find the root causes of the employee turnover rate at the restaurant. In doing so, Six-hat thinking approach can be used by the manager for considering potential decisions from a number of important perspectives. The Six-hat thinking method was invented by Edward de Bono that incorporated lateral thinking in a team-based approach. It represents six hats colored in white, yellow, green, black, red and blue (Paterson, 2006). A white hat represents neutral thinking concerned with facts, red hat included intuitive thinking, black hat is about critical thinking, yellow hat represents optimistic thinking, green hat included innovative thinking and blue hat indicates summarized and organized thinking (Paterson, 2006).
In order to generate solutions, the meeting was called by Spice Temple in which optimistic sales manager, creative marketing manager, fact-driven finance manager, critical human resource manager and impulsive supervisor were present. The focus of meeting was to reduce employee turnover. The outcome of the meeting generated five major causes of high employee turnover:
Mismatched Skills and Job Description:
The major cause of employee turnover was mismatch between the job description and skills of the employees. Especially the chefs who left the restaurant indicated their lack of experience in cooking authentic Chinese dishes due to which they felt discouraged at doing their job in kitchen. The root cause of this problem is inefficient recruitment policy as it resulted in hiring of under skilled or overqualified employees for the given job. Hence, Spice Temple requires reviewing its recruitment process so that an effective job analysis and job description is provided to applicants for a particular position at restaurant. By doing so, the employee turnover will be reduced through reducing the chance of mismatching job requirements and employees’ skills (Vieira, 2005).
Bad Working Conditions
Lack of progressive and supportive working conditions also lead to employee turnover rate. The working conditions at workplace include safety benefits, restroom, off-time, lightning, furniture, food etc. If the employees do not feel belongingness with the restaurant, they will get demotivated and quit the job at the end (Cottini, 2011). In order to make employees feel satisfied, Spice Temple needs to provide homely and friendly workplace environment.
Lack of Personal Development Opportunities
Growth opportunities at the workplace also play an important role in reducing employee turnover. The floor staff and waiters should not feel stagnant by working at Spice Temple. The mangers must ensure that the newly hired chefs and waiters know the growth process in the restaurant so that they can avoid false hopes associated with promotions. In order to grow, the employees must know that their skills will be tested and monitored and benefits will be given for exhibiting mastered skills (Hughes, 2008).
Lack of Training
Training of waiters and chefs play an important role in increasing the motivation level and reducing the employee turnover rate. The lack of proper training (cutlery presentation, food presentation, cooking skills etc.) can result in employees falling behind their level of performance. Therefore, proper training and induction program for new employees must be designed so that they feel motivated and do not leave their jobs (Hughes, 2008).
Wages Rates
Wages play a decisive role for employees to stay or leave the organization. If the wage rates are not in line with the market trend and do not justify the skills and experience of employees, there is a high probability of them leaving the job to find the new vacancy with higher wage rate (Hughes, 2008). Job and wage evaluation process at Spice Temple must be reviewed by managers so that a justified wage rate can be offered to employees in order to reduce employee turnover rate.
Solution Evaluation
By using the categorization, elimination and ranking strategy, the main cause for the high employee turnover rate must be discussed so that the effective measures are taken in order to tackle the main cause. As a result of the brainstorming and strategy of categorization, elimination and ranking, the major cause of high employee turnover at Spice Temple was found to be “unattractive salary package”.
The salary package includes the tips, pays and other fringe benefits including health insurance coverage and bonuses for extra shifts. For many waiters at Spice Temple, pay is predominantly reliant on tips. The work at restaurant is mechanical and requires skills but the salary package that is offered by Spice Temple does not match the skills and level of training taken by the chefs and waiters. Hence, the employees at Spice Temple do not feel tempted towards doing job for longer time period at the restaurant and quickly shift from the low-paying job to high-paying one. Therefore, Spice Temple is required to work towards setting new salary package policy that includes health insurance, bonuses, tips and base salary matched with skills. By doing so, the employees will feel happy and motivated in doing the job that will reduce the high employee turnover rate at Spice Temple.
