Incentives to excel

March 8, 2006

If pizzeria management turnover is an industry-wide problem, no one told the managers at Pizza Plus. The two-unit company outside of Columbus, Ohio, has had one set of managers at one store for seven years, another set for six years at the second. Cheri Yount has managed the Fox's Pizza Den in Punxsutawney, Pa., for 18 years and lasted through two ownership changes. And Joanne Tenney has managed Angelina's Pizza in Olmsted Falls, Ohio, 10 years.

Are these managers freaks of nature? Nobodies with nothing better to do than manage pizzerias? Drones who do whatever the owners say so they can keep their jobs?

Hardly, their bosses say. They're normal people who enjoy the pizza business, like their coworkers and customers, have natural leadership skills and aren't afraid to make decisions. Not freaks, but certainly rare finds those owners want to retain.


What's Important

Management bonuses play a key role in reducing turnover and leading managers to control costs and increase sales.

Managers also are motivated by their boss's trust and appreciation. A good working environment is essential to long-term employment.

For managers to succeed, they have to train hourly employees to execute according to plan. And just like managers, hourlies appreciate positive strokes.

perhaps more interesting is what those managers say about why they've stayed far longer than the industry average of 18 months. Their bosses treat them well, challenge them to do their best, trust them implicitly and provide competitive salaries—boosted by bonus incentives.

"Overall it's a great place to work, and I've got to credit most of it to the owners," said Courtney Underwood, a seven-year manager Pizza Plus in Bexley, Ohio. "It feels really good to know that somebody trusts you that much with their baby. Plus, they take such good care of us that we don't want to let them down."

Underwood, who co-manages the store with her husband, said her base pay is very good and that her bonus program is an equally strong motivator. Like many of her peers, she has to boost sales and controlling labor and food costs to earn any extra.

"We know that the better the shop does, the better we do," she said. "Having that bonus in mind makes us put in that much more effort."

Angelina's Tenney said a bonus makes the difference between a manager who feels like an employee and one who looks out for the whole business. Knowing every increase in labor or food cost chips away at her bonus makes her acutely aware of what employees are doing at all times.

"It makes you watch more carefully what's happening around you and your store than you did before," she said.

But can focusing on the bonus backfire by making her an employee taskmaster? They can, after all, ruin both labor and food costs.

Tenney said no, because that would de-motivate the very employees she depends upon to help her achieve her goals. "It's not just one person; everyone has to work together as a team to make it happen."

Along with three co-managers, Fox's Yount got to design her own bonus program, an experience that taught her just how hard her boss works to promote his business. The quartet was told to pick one a day on which they and the boss would split the business's profits five ways. The boss, however, would step out of the picture and require them to develop a promotion to increase that day's sales, create, produce and distribute promotional materials—and then work the shift without his help.

"That gave me a really good idea of all he has to do to get something like this ready," said Yount. "We had to make sure the boxtoppers went to the printer, that the ad got in the paper, that we came up with the special and that we were able to handle that day's business."

The "Managers' Day promotion" ran last December and Yount admits getting some extra Christmas money was a motivator. But she said the desire to achieve was equally important.

"You just want to do well because you don't want your plan not to come together the way it's supposed to," she said. "I wanted the people to like the special we came up with, too, and I wanted (the owner) to see we could do it."

Mistakes cost money

Avoiding voids is inextricably tied to Tenney's bonuses because they reduce gross sales. Ensuring every order reflects what customers want takes time away from upselling to increase check averages, and that turns her drive for a bigger bonus into a balancing act.

"You're in a hurry to sell something else, but you're also trying to get everything in your store to run efficiently," she said. "You have to remember that giving customers everything they expect is what's most important."

Pizza Plus's Underwood said eliminating mistakes requires constant training and communication with hourly employees charged with the final production. No one makes bonuses if they're not equipped to do their jobs.

"We've got a really good crew that knows not to waste things, to weigh everything we put on our pizzas and to realize there's always something that needs to be done," she said. "We're always

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pretty busy, so there's not much standing around. They know somebody should be folding boxes or doing dishes."

Underwood called her hard-working crew a rare group whose focus and spirit is a product of the tone set by the owners. "I think part of it is that we have such good bosses. People like to work for them."

Her own efforts to care for employees don't hurt either.

"I try as often as possible to say thank you as much as I can because it makes everything more pleasant," she said. "Sometimes, I send somebody out to buy milkshakes or candy for them, just little things to show them we appreciate them."

Jim Toth, catering manager at Angelina's, said a bonus ultimately gives managers a sense of ownership. A person expecting the same check at the end of every week doesn't really care whether business is up or down. But someone who's told he has a share in the success of the company sees the business from a different perspective.

"It is like ownership because you're naturally drawn into helping out and taking care of the business," he said. "It gives you something more to work for, something that makes you think more about being on the team."

Topics: Financial Management , Independent Operation , Operations Management

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