Reference no: EM133524644

Case Study: Barrie Super Subs is one of the larger takeout restaurants in the Super Subs chain, which includes 300 locations across Canada. This outlet has a restaurant manager, an assistant manager, and several part-time team leaders. The restaurant manager rarely has time to serve customers, and front line work by managers is discouraged by the head office. The assistant manager serves customers for a couple of hours during the busy lunchtime but otherwise assists the restaurant manager with purchasing, accounts, hiring, and other operations. Most team leaders are college students and serve customers alongside other employees, particularly from late afternoon to night closing. Most employees are also students who work part-time; a few are in high school. All regular staff earn minimum pay rates.

Barrie Super Subs has experienced below average profitability over the past 18 months, which has reduced the monthly bonus paid to the restaurant manager and assistant manager. This bonus is calculated by percentage of "wastage" (unsold, damaged, or unaccounted for food and drinks) relative to sales; the lower the percentage of wastage, the higher the bonus. Wastage occurs when employees drop or spill food, cut up more toppings than are sold, burn heated subs, prepare an order incorrectly, and eat or give away food without permission. When employees make mistakes, the expense is supposed to come out of their paycheque. Unauthorized eating and giving away food are grounds for immediate dismissal. However, team leaders are reluctant to report any accidental or deliberate wastage, even when confronted by the restaurant manager about the store's high wastage over the previous week and month. One team leader who reported several accidental wastage incidents eventually quit after being snubbed by co-workers who attended the same college classes.

Barrie Super Subs gives employees a food allowance if they work continuously for at least four and a half hours. Staff complain that the allowance is meagre and that they are often ineligible for the food allowance because many shifts are only three or four hours. Employees who work these shorter shifts sometimes help themselves to food and drinks when the managers aren't around, claiming that their hard work justifies the free meal. Some also claim the food is a low company expense and makes up for their small paycheque, relative to what many of their friends earn elsewhere. Several (but not most) employees give some of their friends generous helpings as well as occasional free soft drinks and chips. Employees say handing out free food to friends makes them more popular with their peers.

Five months ago, the Barrie restaurant's wastage (mainly deliberate wastage) had risen to the point where the two managers no longer received a bonus. The restaurant manager reacted by giving the food allowance only to those who work for six or more hours in a single shift. This action excluded even more staff from receiving the food allowance, but it did not discourage employees from eating or giving away food. However, almost 20 percent of the experienced college staff left for other jobs over the following two months. Many of those who stayed discouraged friends from considering jobs at Super Subs. Morale declined, which dampened the fun atmosphere that had existed to some extent in the past. Relations between employees and managers soured further.

With relatively low unemployment, the restaurant manager found it difficult to hire replacements, particularly people with previous work experience of any kind. Temporary staff shortages required the two managers to spend more time working in food preparation and training new staff. Their increased presence in the restaurant significantly reduced deliberate wastage, but accidental wastage increased somewhat as the greater number of inexperienced staff made more mistakes.

After three months, Barrie Super Subs' manager and assistant manager were confident that the situation had improved, so they spent less time training staff and serving customers. Indeed, they received a moderate bonus after the third month in the store. However, wastage increased again soon after the managers withdrew from daily operations. The experienced employees started eating more food, and the new staff soon joined in this practice. Exasperated, the restaurant manager took bolder steps. He completely removed the food allowance and threatened to fire any employee caught consuming or giving away food.

Wastage dropped somewhat over the next month but is now creeping upward again.

Discussion Questions

• What symptoms in this case suggest that something has gone wrong?
• What are the main causes of these symptoms?
• What actions should Barrie Super Subs' managers take to correct these problems?