Real World Problems in
the Restaurant Industry
The bar and
restaurant industry is the one with the highest level of failure. Around 60% of
restaurants that open in the United States will have their doors closed within
the first year, and the statistics for bars are not much better. When it comes
to a popular vacation destination, bar and restaurant owners must be aware of
the business fluctuation that will occur throughout the year. In the small town
of Stateline, Nevada, on the south shore of the beautiful Lake Tahoe, the XX Bar and Grill can witness firsthand the difficulties that small
business bust face when trying to succeed. South Lake Tahoe has recently been
voted the best ski destination in the country, but the area is dealing with a
serious issue: it won’t snow. Local businesses are suffering, because tourists
are cancelling their ski vacations, or relocating to snow resorts in other
areas of the county that are getting more snow.
The XX has been in the area for over 21 years, and although most of its business
in the winter and summer come from tourists, it also has a strong legion of
local loyal customers, who are attracted by the restaurant’s diverse menu
containing burgers, pizzas, sandwiches, Mexican food, and barbeque. The owner, xx., explains that although the restaurant seems to be really successful in
the busy months (summer and winter), it suffers from the lack of costumers
during the fall and spring.
The Interview
During an
interview, xx. was asked to describe what he believed were his biggest
problems with the administration of the restaurant, to which he explained that
job retention could use some improvement, as well as hiring appropriate
candidates. Over the past year, the restaurant has hired over ten waitresses,
bartenders and cooks, to be added to the existing staff of around 20 employees.
Most individuals who work in the restaurant today have been there for over 5
years. All the ones who have recently been hired end up leaving (either
quitting or getting fired). The hiring costs at the restaurant are not necessarily
expensive, but are time consuming. The bar manager has developed an interview
process that she believed to be effective, but it has proven to be quite
ineffective. During the interview process, she would ask the bartender/waitress
candidates questions about their experience and knowledge about making drinks,
serving food and working the computer. What she figured out was that most
candidates would lie, and answer the question with what they believed was what
the manager wanted to hear. Their dishonest is usually only exposed during the
2-week training period, when the newly hired individuals can’t keep up with the
work. At this point, the owner and manager must decide if they will keep those
employees and give them a chance to prove themselves, or count their losses and
fire them, having to start the hiring process again.
The other issue,
although related to the previously explained one, is job retention. Even when
employees pass their probation face and secure a job at the company, many
employees end up leaving the company. In a touristic town, there are many
restaurants, so competition is always present. During the slow season, the XX isn’t able to guarantee to the new employees a full time position,
since the ones who have been there longer have priority over shifts. Because of
this, employees are tempted to search for new job with better security. Many
times employees end up getting a second job, which is accepted by the XX, but fail to successfully maintain both jobs. Also, Tahoe is a very
transitional area, in the sense that it is rare to find someone who was
actually born there. Most people move to the area, live there for a few years,
and move again to somewhere new. Because of that, the restaurant is always
losing good employees who are moving away.
After the
interview with the restaurant owner xx., it was possible to see that although
he is doing a great job running the restaurant, there are many aspects of his
business that would use the advice from an I/O psychologist. The restaurant
industry is the one with the most unstable workforce when compared to other
retail industries (Zuber, 2001). The interview process at the XX,
for example, could use some improvement. An I/O psychologist would suggest
developing a process where the applicant’s skills are actually tested, instead
of a question and answers format. This way, the manager can evaluate if that
individual will be able to do the work or not, before hiring. In the restaurant
industry, most part of the employee turnover occurs in the first 30 days, most
likely because of poor selection procedures (Rothwell, 1992).
When it comes to
job retention, there are several ways the restaurant could make itself a more
desirable and satisfactory work place. “Employees leaving after 60 days
generally do so because of inadequate training and a failure on the part of
management to motivate and provide growth opportunities” (Dermody, Young, &
Taylor, 2004, p. 4). Monetary awards, paid vacation days, promotions, and
encouraging words are all ways to make sure that employees are satisfied and
won’t be looking for other jobs. TheXX provides a great
environment for work, as the bosses are nice and easy to work with. However,
management could try harder to make sure that all employees have a share amount
of shifts on the slow season.
Conclusion
The XX has been a successful local business, but as most small businesses,
it would benefit from the advice of an I/O psychologist. The cost of this
professional would be balanced by how much the company would save with their
hiring and training costs. “Hourly workers are motivated by cash, and can most
effectively be motivated by incentive pay programs that have the potential to
increase cash wages” (Frank, p. 549). In other words, the challenge of
motivating workers in the restaurant industry can be conquered by making sure
employees feel appreciated.
References
Dermody, M. B., Young, M., & Taylor,
S. (2004). Identifying Job Motivation Factors of Restaurant Servers: Insight for
the Development of effective Recruitment and Retention Strategies. International
Journal Of Hospitality & Tourism Administration, 5(3), 1-14.
doi:10.1300/J149c05n0301
Frank, R. (1984). Are workers paid
their marginal products? American Economic Review,74 (4), 549-572
Rothwell, S. (1992). Productivity
improvement through reduced labour turnover. Long Range Planning, 15, 69-73
Spector,
P. E. (2012). Industrial and organizational psychology: Research and practice
(6th ed.). Hoboken, NJ: Wiley.
Zuber, A. (2001). A career in food
service: High turnover, staff in flux leaves morale low, training costs high.
Nation’s Restaurant News, 35(21) 147
Appendix
Questions to the X owner:
1. For
how long has the restaurant been open?
2. Do
you have anyone who helps you run the restaurant or do you do it all by
yourself?
3. Please
name the main problem you have to face while running the restaurant?
4. Do
you have any other areas that could use improvement?
5. Overall,
would you say you are satisfied with the way your employees do their job?
6. What
is the hardest aspect of trying to coordinate a staff of 20 people?
7. Do
you think you would ever hire an industrial organizational psychologist?
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