Operation Management at Pangs Restaurant - Case Study Example

Managing people Name of the Student: Name of the Instructor: Name of the course: Code of the course: Submission date: Executive Summary The operative functions of human resource management are essential in ensuring the success of an organisation. This paper will cover the five operative functions discussed under procurement, development, compensation, maintenance and motivation, and integration. This study forms the basis of explaining to the manager at Pang’s restaurant-a privately owned US restaurant the best practices in the human resource management field. Procurement deals with the planning, job analysis and design, recruitment, and selection. The boundaryless organisation is proposed. In training and development, the Nando’s restaurant case model is addressed and the Success Case Method for the training evaluation. The Job characteristic’s model explains the motivation process and the importance therein. Compensation addresses innovative and creative methods of incentives and rewards. Integration covers the employer-employee relationship and best ways to enhance it and reduce disputes for effective performance. Table of Contents Executive Summary 2 Table of Contents 3 Introduction 4 Procurement 4 Development 6 Maintenance and motivation 7 Fig. 1 The Job’s characteristic model 8 Compensation 9 Industrial relations 10 Conclusion 12 References 12 Introduction Managing people is a vital component in performance of a restaurant because it is a service-oriented industry and customer satisfaction is first-hand. Pang’s restaurant is a privately owned restaurant established in 1976. It was opened up by Lee Chin, a Chinese immigrant after relocating to the US to search for the American dream. The first establishment was in Miami, Florida but closed down due to low sales and high competition. It has since relocated to New York and serves mainly seafoods. The manager faces many challenges in managing people and there is a high turnover rate. The employees have low motivation and this might explain the high turnover rate. According to Pravin (2010, p.3) people can either make or break an organisation. He asserts most problems in organisations arise from conflict between the management and the employees. People management has evolved to the field of human resource management that involves the treatment of employees from selection right to the termination stage. Human resource management is divided into two broad functions: managerial functions and operational functions. The managerial functions involve planning, organising, staffing, directing, and controlling. The operative functions involve procurement, development, compensation, maintenance and motivation, and integration (Pravin 2010, p. 8). This paper will discuss the operative functions of human resource management in respect to helping the manager at Pang’s restaurant manage his employees better. Procurement The procurement function involves planning, Job analysis and design, recruitment, and selection (Pravin, 2010, p. 8). Planning is the first step in procurement and involves identifying a company’s goals and setting up measures to achieve them. It may take two forms: Bottom-up planning or top-down planning (Halan, 2005, p. 26). Bottom-up planning involves asking the various departmental heads about their year plans at the beginning of the year and allocating the budget or other needs accordingly. On the other hand, top-down planning involves the top managers allocating budget for each department and then the departmental heads figure out how to use it. The manager of Pang’s restaurant should utilise the bottom-up method because it is more realistic and holds the departmental heads accountable for their actions. The departmental heads also feel good when their opinions are valued and it is a good motivator. Job analysis and design involves identification of skills and abilities that are required of a worker in the relevant department. Recruitment involves the methods used in inviting the right group of candidates. Selection then follows where the best-suited candidate is picked. In the current times, globalisation has liberalised the labour market. Functional boundaries are less important creating a dilemma for the human resource manager. To account for these challenges, the human resource manager at Pang’s restaurant should create a boundaryless organisation. This is a paradigm shift whereby the management appreciates the limitations of dividing people, tasks, and places in the 21st century and advocates information sharing, moving talent and ideas where required (Nelson, 1997, p. 39). Boundaryless job analysis challenges the departmental heads and managers to identify knowledge, skills, and abilities required by the organisation, then combine the traditional job titles into cross-functional and challenging categories (Nelson, 1997, p. 43). Boundaryless recruitment involves personal-organisational fit models. This model requires the organisation to identify its unique culture and values and the personality traits of the candidates. The management then communicates its culture vividly to the potential candidates so that they can make realistic expectations before accepting the offer. This will help the restaurant in reducing the rate of turnover (Nelson, 1997, p. 45). Boundaryless selection on the other hand involves selecting the candidate with diverse knowledge, skills, abilities, and the best personality capable of doing a wide-range of duties. To assess the personality traits, the manager may use the big five personality traits that include conscientiousness, extroversion, agreeableness, emotional stability, and flexibility (Nelson, 1997, p. 46). These qualities are important in a restaurant due to the close contact with customers. Development Development involves training and development of both the employees and managerial team to enhance their level of knowledge, skills, and abilities (Pravin, 2010, p. 9). Nandos restaurant won four awards in the UK consecutively in 2005 and 2006 (Pollitt, 2006, p. 53). Their training program will give Pang’s manager insight into the best industry practices. At the managerial level, they have a coaching program that involves two programs. One, they are coached on the situational leadership model. This model recognises development of a leader to be a gradual process. They then apply what they are taught at the restaurant through demonstrations to the other colleagues as a test. This ensures high levels of competency and commitment. In the second program, the managers are tasked with developing an action plan that involves the directors, management team, and employees (Pollit, 2010, p.54). The newly recruits undergo an on-site training program for ten days where they are taught the company values, food safety standards and hygiene, and general discipline. Then a two-day practical session at the restaurant follows (Pollitt, 2010, p. 55). To maintain the level of development, the management developed the buddy system (Pollitt, 2010, p.66). This has been replicated for use in various restaurants globally. Each restaurant has two professionally trained staff who acts as training managers called ‘buddies’ and are responsible for each staff managerial and employees. According to Brinkerhoff (2005, p. 86) a training program does not achieve results but performance. The manager will need to evaluate the training program to measure performance. Brinkerhoff (2005, p.86) asserts that the unlike the traditional evaluation programs that emphasised the training effect, Success Case Method gives an in-depth analysis of the training program. The method employs the survey method where a single question on the training program’s effect on the participant and the business is sent to all participants. Then, the recruiting team identifies a group of participants who performed extremely well and another group that performed poorest. The two teams are then probed in details to evaluate their training application value, the context that enabled the best performing group, and the obstacles that hindered the underperforming team. The evaluation is carried out as an internal case study and the information identified used to correct the pitfalls and enhance the strengths. Maintenance and motivation Maintenance and motivation involves enhancing the employee’s well being, with an aim to retain the best personnel in the organisation (Pravin, 2010, p. 9). The job characteristics model developed by Hackman, Oldham and their colleagues gives the best model for the manager to use. According to the model, for an employee to feel motivated, there must be three psychological satisfactions. He or she must feel personally responsible for the job’s results, the employee must feel that their individual contribution adds onto the overall success of the company, and they must feel that their individual efforts are translated into performance (Ramlall, 2004, p. 57). For the work to be meaningful, three factors are required: identifying the task, significance of the task, and skill variety. The best tasks that give the employee fulfilment are those that require them to utilise multiple skills and that the employee can visualise their result in the overall performance of the organisation. This creates high internal motivation. This is consistent with the bounderyless organisation that asserts that functional distinctions are blurring in current times and work should be cross-functional (Nelson, 1997, p. 43). The employee also needs to experience autonomy. Autonomy relates to the freedom the employee experiences in exercising their ideas. The manager needs to give the employee independence as this enhances creativity for example in developing new menu items. The manager needs to be less critical of such efforts but encouraging and he may also learn some new things along the way. As the diagram below shows, it results in high satisfaction and excellent quality work. In addition, the manager should provide feedback to the employee. It encourages low turnover and absenteeism rates (Ramlall, 2004, p. 58). However, the feedback should be constructive feedback. When correcting, the employee should not perceive it as a rebuke but rather an opportunity to improve and grow. Positive feedback should also be given if good results are realised. Moreover, feedback should be two way. The employees should feel at ease in expressing themselves to the manager and the manager should be ready to take the criticism positively. Fig. 1 The Job’s characteristic model The Job’s characteristic model (Ramlall, 2004, p. 63) Zhu et al., (2012, p. 194) asserts that an effective motivator has the qualities of a transformative leader. Such a leader is a good communicator and leads by example. To change the negative culture currently in the team, the manager ought to be willing to do the dirty work even sweeping floors as long as it will motivate the floor sweeper more. The manager should always remember that the restaurants success is a function of all employees excellence. Compensation The manager should be creative in developing incentives for the employees for example the use of experience certificates. The manager can partner with travel companies or agents to offer the employees subsidised holiday rates or even free tickets. The hotel can offer to display the travel company’s tickets alongside the menu or at a convenient place around the premises. For every ten tickets sold, the travel company can offer a free ticket for the hotel’s staff. The manager may also use redeemable gift certificates especially during the low season when the employee is least expecting it (Sullivan, 2000). This will greatly boost their morale. An incentive may not necessarily have to be money-oriented. The manager may allow the employees to nominate one of their own as the best performing in a certain week. Let the employees develop their own reward for the best. In this way, the manager ensures team cohesion with minimal effort on his part. A Boston pizza manager asserts that ordering food that your hotel does not provide is a fun-rewarding incentive for example in ordering Taiwanese food for the Pang’s employee (Sullivan, 2000). Behavioural science theories indicate that employees work for greater things than just money such as psychological social, and safety needs (Bhattacharya, 2009, p.11). Bhattacharya (2009, p.9) asserts that an employee creates an implied psychological contract with the management that can either be long-term or short-term. In the short term, the employee expects monetary compensation such as wages but in the long-term, the employee expects security. To add value to the short-term contract the manager can promise the employees a certain percentage of the company profits if a pre-set target is met or annual cash rewards (Community banker, 2001). These are also known as performance rewards. To enhance the long-term psychological contract for the best employees, the manager can devise a share allocation formula for long-term employees that enables them to own the company partly for the duration of their stay. This builds trust between the employee and the employer. In addition, Bhattacharya (2009, p.9) asserts that for the better retention of personnel, a manager should seek balance between the two. Industrial relations Industrial relations involve the relationship between the management and the employee. After effective recruitment, selection process, and training, there needs to be an effective relationship between the management and the employees. To enhance this relationship, four conditions should be met. The employee should understand the communication channel between the management and the employees, the employee should view his decision-making as consistent with the overall operations of the organisation, the decision should be compatible with his individual interests, and the employee has the capacity to fulfil the decision both mentally and physically (Novicevic, Bynum, and Hayek, 2011, p. 130). Barnard (Novicevic, Bynum, & Hayek, 2011, p. 129) asserts that authority does not rest with the management but with the employees in their will to cooperate. In the restaurant, the employee is always in close contact with the customer. There is increased risk that the employees’ lack of cooperation with the management will be transferred to the customer. Consequently, bad reception will lead to loss of customers and eventual poor sales. Industrial relations also include dispute resolution mechanisms. This includes the right to join industry trade unions. Trade unions emphasise collective bargaining and believe that increase in salaries result to employee fulfilment. However, the results in the past indicate that collective bargaining results in increased friction between the management and the employees and the management and the union. To solve this dilemma (Novicevic, Bynum, & Hayek, 2011, p. 131) assert that collective cooperation as opposed to collective bargaining is the best approach. It is characterised with minimal friction and reduction in costs and the employees are able to increase their interest in the work. Kaufman 2001 (Novicevic, Bynum, & Hayek, 2011, p. 132) asserts that dispute resolution in an organisation should be an internal process and employees should be expressly involved in the process. Measures such as quality circles, sharing profits and other incentive mechanisms earlier discussed can help in this process. The Japanese management style demonstrates the best dispute resolute mechanism in organisations (Che Rose & Kumar, 2007, p. 249). The management style emphasises teamwork approaches as opposed to individual approaches. Teamwork in this case considers the management and employees as one team. This is important in restaurant management where service is more important than the product. The manager therefore needs to reduce high-handedness and practice transformative leadership as addressed above. Conclusion It is apparent that the management holds the responsibility for ensuring good relations with the employees. Managing people is an overall process and requires not only good practices within employment but also during the selection process. Due to globalisation the employee is geographically and occupationally mobile and therefore good human resource management practices are vital to the success of the restaurant. The manager ought to ensure that bottom-up planning method is used in planning, boundaryless organisation model in job design and analysis, recruitment, and selection, training and development of staff, and evaluation of the training process using the Success Case Method. In addition, he should ensure that the employees are well motivated and the relationship between the management and employee enhanced through collective cooperation. Moreover, the manager should come up with innovative incentive methods to retain the staff. References Bhattacharya 2009, Compensation management, Excel Books India, New Delhi. Brinkerhoff, RO 2005, ‘The success case method: A strategic evaluation approach to increasing the value and effect of training’, Advances in Developing Human Resources, vol. 7, no. 1, pp. 86-101. Che Rose, R & Kumar, N 2007, ‘The transfer of Japanese-style HRM to subsidiaries abroad,’ Cross Cultural Management: An International Journal, vol. 14, no. 3, pp. 240-253. Community banker 2001, ‘Creative compensation and performance-based incentives’, January 2001, p. 54. Halan, YC 2005, Managing people, Sterling PublishersPvt. Ltd, New Delhi. Nelson, JB 1997, ‘The boundaryless organisation: implications for job analysis, recruitment, and selection’, Human Resource Planning, vol. 20, no. 4, pp. 39-49. Novicevic, MM, Bynum, LA, Hayek, M 2011, ‘Intergrating Barnard’s and contemporary views of industrial relatioins and HRM’, Journal of Management History, vol. 17, no.1, pp. 126-138. Pollitt, D 2006, ‘Training provides the recipe for success at Nando’s’, Training & Management Development Methods, vol. 20, no. 5, pp. 53-57. Pravin, D 2010, Human resource management, Dorling Kindersley (India) Pvt Ltd, New Delhi. Ramlall, S 2004, ‘A review of employee motivation theories, and their implications for employee retention within organisations’, The Journal of American Academy of Business, vol. 5, no. ½, pp. 52-63. Sullivan, J 2000, ‘Recognize the importance of incentives and rewarding employees’, Nation’s Restaurant News, p. 36-37. Zhu, W, Sosik, JJ, Riggio, RE, & Yang, B 2012, ‘Relationships between transformational and active transactional leadership and followers’ organizational identification: the role of psychological empowerment’, Journal of Behavioral and Applied Management, vol. 13, no. 3, pp. 187-212. Read More