Justin received a positive reception from his managers with his discussions regarding increasing revenues by 15 percent within twelve months and now has an open dialog with them. That is a great first step. Now he is looking for ways to keep them motivated and working every day towards an annual goal. He should also look at the rewards he is offering. Different people enjoy different rewards. The designation “Store Manager of the Year” is meaningless if every manager in the franchise achieves it. In the same line of thought, if the “Store Manager of the Year” goes to the first manager who achieves his goal in addition to the other recognition incentives it might inspire some friendly competition. Since he has an open dialog on the topic with his managers he may find more success in keeping them motivated if he continues the discussion and asks them what they would like to receive in recognition of their efforts.
Several studies have shown that performance related pay serves as a powerful motivator to increase productivity. A Dutch study showed almost universal increases in productivity within companies that adopted performance related pay. The most dramatic increases were among individual workers who performed measurable piecework and got their pay increases on a regular, almost immediate basis.
Financial remuneration is just one way of increasing productivity --- and increased productivity is just one factor in increasing profits. The high staff turnover associated with the food industry is a great drain on its profit margin. When a staff member leaves it costs around 100% to 200% of an employee’s base salary to recruit and train a replacement. The national staff turnover average is between 78.3% and 94.4% however, some business enjoy much lower rates. . While these business range across the hospitality industry spectrum they engage similar employee retention and motivation devices. Successful motivation devices do not always rely on increase pay or bonuses to show appreciation. Having a variety of job titles, even if they are not associated with an increase in salary is one method. For example, the employee who has been with the company longest could be designated “Senior Grill Chef” or “Senior Cashier.” Assistant managers with specific duties such as Inventory, Staff and Customer Relations can be designated. Customers can be engaged to vote for staff as most helpful or brightest smile, and sometimes all a tired worker needs to hear is “Good Job!”
Likewise, the managers may need Justin’s ongoing encouragement and support. Not in the sense of micromanaging where he tells them what to do, but to express his sincere gratitude for their efforts, asks if they have any suggestions for how Justin could help them realize their goals and to ask for proven success techniques he could share with the other managers. In a Florida study using the CANE Model (Commitment And Necessary Effort) researchers found certain factors that increased both motivation and retention in hospitality industry staff members. Some of the factors involved in motivating and retaining employees apply in Justin’s situation. His managers need to know they can make that 15% goal, that
Justin will support their efforts and that they will feel good about the job and themselves if they do. Feeling good about a job is important; people will commit more effort to a task even if all they get from it is the feeling of a job well done. That does not negate the self interest factor, they do want to know “what’s in it for me?” and this is where Justin’s ideas about rewards kicks in. If all the other factors are in place the managers and their staff will be continuously encouraged to keep engaged in the ideal of improving profitability with incremental rewards and a final goal in mind.
Condly, S. P., & DiPietro, R. P. (2008). Motivation in the Hospitality Industry. Retrieved February 6, 2012, from Incentive Research Foundation: http://www.incentivecentral.org/employees/whitepapers/motivation_in_the_hospitality_industry.1903.html
Gielen, A. C., Kerkhofs, M. J., & van Ours, J. C. (2009, March 26). How performance related pay affects productivity and employment. Retrieved February 7, 2012, from Journal of Popular Economics : http://arno.unimaas.nl/show.cgi?fid=16990