Perfect Pizzeria Case Study

Perfect Pizzeria is experiencing managerial and employee problems that are negatively affecting the chains second largest franchise located in located in Southern Illinois.

The overall issues that we will address in our case study for Perfect Pizzeria are: the lack of formal training, systematic criteria for the selection of managers and employees positions; the high turnover rate; the lack of incentive/rewards for employees aside from management; low profit rate due to high percentage of damage or unsold goods, lack of employee loyalty and motivation, no room for advancement beyond management unless employees invest in the franchise.

And lastly, the lack of organizational structure with respect to not having an official handbook outlining the company’s policy and procedures, goals and objectives of the company. Additionally, we will address the Rational Choice Decision-Making Process, the Exit-Voice-Loyalty-Neglect (EVLN) model as well as the Expectancy Theory which is based on “the idea that work effort is directed towards behaviors that people believe will lead to desired outcomes”. Mcshane & Von Glinow, 2011).

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It is our goal to provide you with our case study that will give you a detailed analysis of Perfect Pizzeria and our recommendations on how to successfully get them back on track in terms of gaining higher franchise profits, attracting and retaining qualified workers, establishing a respectable managerial and employee relationship, allowing for an inclusive receipt of bonuses and rewards for outstanding job performances by any employee, not just management.

Problem Statement Perfect Pizzeria currently does not have a systematic selection criterion for hiring managers. Managers demonstrate low expectancy to performance and do not properly execute their role as a manager. Hence, managers lack the leadership and problem resolution techniques to properly communicate with their employees. Consequently, the lack of communication between managers and employees has lead to low morale and ennui within their organizational structure.

The objective of this case analysis is to address the multiple symptoms within Perfect Pizzeria which are:

1. improve managerial skills,
2. improve employee morale,
3. improve profitability,
4. increase communication between employees and management,
5. improve work quality,
6. monitor employee progress,
7. provide feedback to the employee.

Perfect Pizzeria is experiencing managerial and employee problems that are negatively affecting team morale, loyalty, and causing a more consistent rise in the percentage of food and beverages unsold or damaged leading to low profits for the franchise.

In view of that, the work environment appears to show that the employee’s lack job satisfaction and motivation. Analyzing Case Data Management Employees The case study of Perfect Pizzeria outlines several management criteria that were not in the best interest of the organization. The lack of hiring procedures and guidelines plays an instrumental role in their management system. Perfect pizzeria is staffed primarily from college and high school students; however, when hiring for management positions there is no systematic criteria in which to select the best-qualified person for the job.

Those currently occupying leadership positions do so without the proper leadership training or experience to handle the open communication required to build team cohesion in a food franchise environment. While managers in general implement policy and procedures in most franchise environments, Perfect Pizzeria lacks the control mechanisms to monitor employee behavior. Thus, not providing the appropriate negative consequences for any employee that may exercise opportunistic behavior while not under direct supervision.

The lack of guidance for management positions has integrated personnel within the organization lacking the skill sets necessary to control the behavior of their shift employees. The behavior demonstrated by unqualified mangers hired at Perfect Pizzeria contradict Kaafi and Noori’s (2011) conclusion that “a manager’s primary outcomes are job performance, organizational commitment and quality of work life”. To further illustrate the lack of policy and guidelines managers are not afforded the opportunity of initial or continued training in which they can maintain their skills.

To illustrate, Perfect Pizzeria recruits within its ranks for assistant and night shift mangers based on the capability of performing the duties of regular employees. Employees promoted to assistant and night managers maintain the same pay scale as non-managerial employees. In contrast the manager is the only employee that is provided with a bonus incentive if the percentage rate of unused/damaged food is low at the end of the month inventory check.

A necessary way for managers to smoothly start establishing any new changes to the way they conduct business is for them to be aware of the different workplace emotions around them, internally and externally. Acknowledge what’s going on with their employees, as well as the emotions of the customers, so that everyone’s needs or concerns are addressed. Not acknowledging them has lead to counterproductive workplace behavior by employees and a loss of loyal customers.

Emotions in the workplace have a large impact on the company’s immediate and long-term goals, whether it is positive or negative because it determines just how productive an employee will be. Non-Managerial Employees The working conditions the employees at Perfect Pizzeria display are contrary to company goals and objectives. Manager-employee relationships within Perfect Pizzeria have declined; employees no longer share the ethical values to help them choose to do what’s right when making a decision that can negatively impact the franchise.

Employees take advantage of food compensation provided by management while on shift without fear of reprimand from managers. Such acts as eating the food at the pizzeria without paying or simply being careless and damaging food or beverages, directly contributes to the increase of unused/food waste numbers. Perfect Pizzeria employees demonstrate ennui, which directly affects their outward behavior. While the negative disposition may not be directly shared with all employees on shift it is reasonable to say that it is a dilemma that can be contagious to other employees.

Research provided by Manzoor (2012) states that employers ultimately need employees that work well with others. While a team member performs a specific job that is equally important to the overall success of the team. The current employees at Perfect Pizzeria lack the proper monetary motivation to commit to their duties and organizational goals resulting in high turn over rates. Key Decision Criteria

In order to improve the events that have occurred at Perfect Pizzeria, the decisions that are made must:

1. improve managerial skills
2. improve employee morale and decrease turnover rate
3. improve profitability
4. increase communication between employees and management
5. improve work quality
6. monitor employee progress
7. provide feedback in order to help the employee’s to grow and develop skills useful to the organization.

Hire Qualified Management Based on a professional association of practicing managers, American Management Association, managers need certain skills to perform the duties and activities associated with being a manager (Jones 2009).

When hiring potential managers, Perfect Pizza should not only look at the human skills of the individual but also ensure that potential managerial candidates also have communication skills, effectiveness skills, interpersonal skills, and conceptual skills. Communication skills is the ability to transform ideas into words and actions. It is the set of skills that enables a person to convey information so that is it received and understood. Effectiveness skills is contributing to the company’s mission/departmental objectives, customers focus, and multitasking (Jones 2009). Interpersonal skills is coaching and mentoring, diversity.

Being able to work with diverse people and culture, networking within the organization, networking outside the organization, and working in teams. Conceptual skills is the ability to use information to solve the company’s problems, recognizing problem areas and implementing solutions, and understanding the company’s business model.

Criteria 2: Improve employee morale & decrease turnover Alternative: Reward, bonuses & incentive program According to the research of John Gray, if an employee incentive program is run correctly, it can increase the employee morale and productivity and performance (Gray 2006).

When employees in the organization are happy, it can lead to positive outcomes.

Criteria 3: Improve profitability Alternative: Employee Training Programs A common mistake made by many organizations is the failure to adequately invest in the continued training of their employees after they are hired. Based on research from the Management Association of Illinois, one of the biggest factors in maintaining employee satisfaction levels and the company’s profitability is the amount of training companies provide (Silverman 2009).

The training and development of employees through training programs is an essential part of their satisfaction and longevity and should be made a priority of the organization. Training programs not only help to bolster employee satisfactions and the company’s profitability, but also produce tangent benefits for the company.

Criteria 4: Increase communication between employees & management Alternative: Interacting with employees inside & outside of work Many companies do not realize that interacting with employees inside and outside of work will increase communication with employees and management.

According to research from the American Management Association, participating in activities, creating a sport team, community service, and volunteer services outside of work will help employees and managers unwind and get to know each other better (Jones 2005).

Criteria 5: Improve work quality Alternative: Assure employees with positive communication More emphasis should be placed on employee standards and job matching responsibilities. Perfect Pizzeria employees are interdependent of one another in order to produce their product.

Hence, in order to promote job consistency employees need to be educated on what their duties and expectations. An employee cannot work up to the expected standard if they are not aware of what is required of them. The following pointers will help attain this goal:

• All staff regardless of their roll must have a clear understanding of what the business actually does and know the names of all the products and its main competitors.
• Ensure they have a good enough understanding of who does what to be able to find someone to help a customer when the need arises. The management must take time to explain the organization’s aims and objectives to the employees.
• Set measures for the business that they can all contribute.
• Provide a clear and simple report to show them how the business is doing.

Criteria 6: Monitor employee progress: Alternative: Leadership opportunities Perfect Pizzeria should implement a deliberate internal program that encourages a sense of ownership with their employees. Keeping the staff informed, prepared and up to date with all company operations is key.

• The following pointers will help attain this goal:
• Staff must have a clear understanding of product
• Explain the organization’s aims and objectives to the employees
• Set measures for the business that they can all contribute
• Provide business progress report

These steps are in line with the expectancy theory which is a motivation theory based on the idea that work effort is directed toward behaviors that people believe will lead to desired outcomes.

Feedback to employees about their performance through quarterly assessments helps improve their performance, motivates self-improvement, and builds trust (Lun 1999). Action and Implementation Plan Employee Handbook Based on the recommendations listed above, Perfect Pizzeria needs to overhaul the way that it is currently doing things to be competitive in their market. The most important thing that needs to happen is Perfect Pizzeria needs to come up with official documentation that sets the standard for the company policy and procedures.

This can be achieved by developing a new employee handbook that will be given to all employees. It will also be given to all the newly hired employees as part of their orientation process. According to Felsberg (2004), an employee handbook will be carefully drafted and periodically reviewed by the Human Resources department. The handbook will be reviewed and updated at least every two years. If policies or laws change, updates can occur more frequently. The employees will be required to date and sign the handbook acknowledging that they have reviewed it.

This ensures that the employee understands the company’s policies and practices. The section of Perfect Pizzeria’s handbook that would need the most change is the employment policies. The responsibilities of the employees need to be clearly laid out so the supervisors and the rest of the team know where they fit in the organization. The supervisor’s responsibilities are not only to represent the company’s management to its employees, but to represent the company’s employees to its management. The team’s responsibility also needs to be revamped because every phase in producing the company’s product is important.

Reward and Bonus Program According to Hsieh (2011), employees who perceive a greater fit with their employer are less likely to leave the firm, are more committed to it, and have higher work satisfaction. Reward practices logically serve as motivators, shaping employee behaviors. Rewarding employees for ideas that minimize or eliminate costs is more important in an overall cost leadership strategy. A rewards system is an important part of an organization’s human resource strategy. The old bonus system of rewarding the manager does not work in today’s business environment.

With the old system, if the percentage of food unsold or damaged in any way is very low, the manager gets a bonus. Modern organizations must make their rewards system to help achieve higher performance at not only the managerial level but at the team level. The perfect system helps the company give the right amount of reward, to the right people, at the right time, for the right reasons. The new system will continue to reward the managers for the low percentage but an employee reward and bonus system will also be created.

An Employee of the Quarter program will be created and based on performance perceived by the managers and fellow employees and quarterly evaluations. The Employee of the Quarter will be recognized in a company newsletter, a plaque, and also a cash bonus. This will make sure that the manager are not the only ones being rewarded and will motivate the team to not only work harder, but smarter. Training Program New employees will go through a formal training program where all employees should be able to complete a number of tasks to make sure that they can do their job proficiently.

Psychologist David McClelland recognized that a person’s needs can be strengthened through reinforcement, learning, and social conditions. McClelland examined three “learned” needs: achievement, power, and affiliation. McClelland’s research supported his theory that needs can be learned, so he developed a training program for this purpose. Perfect Pizzeria will incorporate his achievement management program for employees. Trainees will write achievement-oriented stories and practice achievement-oriented behaviors in business games.

This training period will also include new managers. Managers will learn about McClellan’s “need for power. ” This need is where people want to control their environment, including people and material resources, to benefit themselves and others. It will be mandatory for managers to attend a program, which will include management classes. The management classes will provide management expectations, operational procedures, and the basic concepts to be successful. Serving the customers is the cornerstone of Perfect Pizzeria.

In the training program, managers will learn how to communicate with all types of customers, vendors and co-workers. Out of everything they learn, customer service is the one skill they will use every minute of every hour of every day they are at Perfect Pizzeria. The training program will cover proper management techniques to problem solving. Once they have completed the program, they will be able to handle any situation. Softball Team To increase communication with the employees and management, Perfect Pizzeria will form a team and join the local company softball league.

With all the reasons for starting a softball team, such as physical fitness, stress relief, and fun, the most important reason is strengthening relationships. Playing softball together helps co-workers form and strengthen friendships, and instills a sense of camaraderie among company players. Co-workers who don't communicate outside of the workplace will get a chance to interact and get to know each other, and close associates can enjoy seeing different sides to the people they work with every day.

A softball team will also support employees’ “need for affiliation. ” This need is where people seek approval from others, conform to their wishes and expectations, and avoid conflict and confrontation. Employees with a strong need for affiliation project a favorable image of themselves. They actively support others and try to smooth out workplace conflicts. They also work well in coordinating roles to mediate conflicts and cultivate long-term relationships. Quarterly Evaluations Throughout the year, the employees’ performance will be tracked.

According to DelPo (2007), a log for each employee will be kept on a computer. Memorable incidents involving that employee, whether good or bad, will be noted. If an employee is going above and beyond what is expected or they really mess something up, immediate feedback will be given orally or in writing. The manager will let the employee know that they noticed and appreciate the extra effort or that they are concerned about the employee's performance. If a manager gives oral feedback, they will make a written note of the conversation for the employee's personnel file.

Every three months, a manager will formally evaluate each employee by writing a performance appraisal and holding a meeting with the employee. The appraisal will include each standard or goal that is set for that employee, the manager’s conclusion as to whether the employee met the standard or goal, and the reasons that support their conclusion. At the meeting, the manager will let the employee know what they did well and which areas could use some improvement. The manager will explain his or her conclusions about each standard and goal.

They will also listen carefully to the employee and ask the employee to write them down on the evaluation form. Conclusion Overall, Perfect Pizzeria can overcome their managerial and employee problems as well as prevent a high percentage of profit loss by carefully implementing new organizational changes. The changes outlined within our action and implementation plan will lead to employee motivation, high morale, low turnover rate, qualified applicants, respect for managers, and effective systematic criteria for the selection of managers and employees, and formal training classes for managers.

Therefore, it is imperative that these positive changes be made immediately in order for Perfect Pizzeria to prosper.

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