Wednesday, December 31, 2014

Focusing on employee relations in the recession is a cheap means to boosting profitability.

During tough economic times, it’s usually the most abstract aspects of a business that get trimmed to save money and streamline business. Such can be the case with employee relations, an element of business that often is taken for granted.
But experts and analysts warn that owners and operators should not only be sparing their employee-relations programs during this recession, they should be strengthening them. Solid, consistent employee relations are fundamental to a restaurant’s success, and during these fiscally dour times, these programs may make all the difference.
Jackie Wells Smith is the publisher of Your Employee Handbook and a former human resources executive and consultant of 25 years. She says fostering positive employee relations is the single most important area owners and operators should focus on, especially in the small-business sector. Not only does it improve productivity, but it may also address larger problems occurring at a restaurant.
“In my experience, lack of attention to employee relations is usually the source of whatever problems [an owner or operator] is having,” Smith says. “If they have retention problems, turnover problems, problems with frequent accidents, I generally find that the source of it was always the same place: Employees were unhappy with their jobs.”
Restaurant consultant David Scott Peters, founder of Smile Button Enterprises, says that most quick-service managers have an overly simplistic understanding of why employees are discontented with their jobs, which breeds an even more simplistic understanding of what their happiness looks like.
Even more important than fostering positive morale, Peters says managers need to give employees a sense of how their performance will be measured. The absence of that understanding breeds displeasure, and that, in turn, leads to poor performance.
“I believe there are five major reasons why your employees leave you, and the first three are critical,” Peters says. “They don’t know what they’re supposed to do, they don’t know how to do what they’re supposed to do, and they don’t know how well it’s supposed to be done.”
This, Peters says, is yet another example of underestimating the importance of employee relations. It all begins with management clearly communicating to the employee what his or her goals are, and what will be the measurements of their success. If each staff member knows the “what, how, and how well” of his position, he will be more self-motivated on the job.
“The games, the manager bonuses, the prize incentives, they’re all great. And they may create a new behavior for the time being,” Peters says. “But they don’t change and motivate everyone. The key is creating an atmosphere that motivates. If you don’t have the fundamentals down, none of that warm and fuzzy, one-minute-manager stuff will work.”
Dan Simons is co-founder of Vucurevich|Simons Advisory Group, a hospitality and restaurant consulting firm that works with chains like Fuddruckers and Terra Burger. He, too, believes employee relations is the area to which owners and operators should first look if they are needing to boost profitability.
“Human performance is directly related to human emotion,” Simons says. “You simply cannot separate your restaurant’s culture from your profitability. If I have a client with a food cost problem, I start with their employee relations. How do they feel? How do they look? Do they have pride in their appearance? The self esteem and the pride of the employees translate in measurable ways.”
But fostering that culture of profitability has less to do with nurturing the egos and emotions of one’s employees and more to do with creating an atmosphere where high performance and efficiency are expected and rewarded. Simons says that too often, owners and operators talk about the workplace culture in terms of being soft and caring and possessing good listening skills. But that’s just the surface.
“I’m talking about a high-performance environment that inspires people and holds people accountable to give their best,” Simons says. “Humans play to the level of the competition, and the boss has to set the bar high.”
In addition to setting clear employee expectations, owners and operators can also encourage a culture of high performance by making sure each staff member feels important to the overall operation. This is something that restaurant consultant Ron Wilkinson says is often overlooked in the realm of employee relations.