Factors Affecting Working Performance Notes

Factors Affecting Working Performance

  • Besides sound human resource management, several factors influence the labour amount:

    • Menu items
    • Use of convenience foods
    • Type of service
    • Quantity of meals and number of meal periods
    • Facility layout and design and production equipment
    • Work environment and number of hours worked
  • The number and complexity of menu items affects the production hours needed.
  • Many items requiring difficult production techniques will require more preparation time per item.
  • A limited number of items requiring minimal preparation will require less time.

Use of Convenience Foods

  • Foods prepared on site require more preparation than similar menu items made with convenience foods such as pre-portioned meats or desserts.

  • Labour costs can be reduced by using convenience foods.

  • Consider that convenience foods:

    • Can increase food costs.
    • May affect product quality (however, high-quality ingredients and preparation can provide uniform portions of very good quality).

Type of Service

  • Restaurants that feature complex dishes require more labour than cafeteria-style or fast-food operations.
  • Restaurants requiring a higher level of skill to prepare complex dishes need more experienced (and higher-paid) staff.

Quantity of Meals and Number of Meal Periods

  • The volume of business affects the labour amount required.
  • Each restaurant has a minimum staffing level to operate.
  • Serving fewer people than this minimum level can handle results in very high labour costs.
  • Different menus for each period requiring set-up and tear-down time can affect restaurant productivity.
  • Different menus usually mean a larger number of menu items, also affecting labour.

Facility Layout, Design, and Production Equipment

  • Restaurant kitchens are often designed last, resulting in awkward and inefficient layouts.

  • Work surfaces and storage areas required to produce an item should be located close together.

  • This includes dry storage, refrigerated storage, freezers, storage for plates/glassware, work counters, grills, fryers, and ovens.

  • Poor kitchen layout can:

    • Limit the number of individuals who can work efficiently.
    • Require time-consuming trips to distant storage areas.
    • Increase the minimum staff needed to operate each station (e.g., a salad preparation person may be needed even when the restaurant is not busy if the station is located far from the main kitchen).

  • Production equipment (mechanical peelers, choppers, mixers) can reduce the time spent on tasks.

  • Match facility design and equipment to expected volume of business.

    • Too large a mixer will not warrant the extra expense of purchasing the equipment given the related cleaning work.
    • Too small a mixer will reduce efficiency.

  • A very compact kitchen layout may allow efficient operation with only one cook, but may be unable to meet the demands of a high sales volume.

Work Environment and Number of Hours Worked

  • A hot, humid, noisy environment reduces comfort and increases stress, negatively affecting performance.
  • Long hours and hard work without reasonable breaks can lead to reduced productivity.
  • Being understaffed means everyone has to work harder/longer, resulting in tired staff and reduced productivity.

Productivity Standards

  • Establish productivity standards as a first step in determining staffing needs.

  • These standards must account for the time necessary to produce food of the required quality, based on procedures dictated by standard recipes.

  • Productivity standards are measured in labour dollars or labour hours.

    • Labour dollars measure productivity in terms of the number of dollars that must be paid out in labour to generate a certain revenue.

      • Advantage: easy comparison with budgets and financial statements (also expressed in dollars).
      • Disadvantage: time-consuming to calculate given different wage/salary scales.

    • Labour hours indicate the number of hours of labour needed to produce a given number of meals or generate a certain amount of sales income.

      • Advantage: less time-consuming to calculate.
      • Advantage: simple tasks may take the same time regardless of who performs them.

Determining Requirements

  • The productivity standard is determined by comparing the number of labour hours scheduled to the meals served or sales income generated.
  • Standards can be produced by department, shift, position, or position and shift.
  • More detailed standards make it easier to pinpoint problem areas and take corrective action.
  • It makes sense to look at each position and shift.
  • Generally, more servers are needed than cooks for a given number of meals, and fewer dishwashers may be required.
  • If only a single labour standard is developed for the restaurant, it will be harder to pinpoint problems with labour costs.

Staffing Guide

  • A staffing guide tells the manager how many labour hours are needed for each position and shift to produce and serve a given number of meals.
  • It incorporates the productivity standards.
  • It tells managers what number of labour hours are needed for the volume of business forecast for a given meal period.
  • The labour hours can be converted into labour dollars to establish standard labour costs.
  • The staffing guide serves as a tool for planning work schedules and controlling labour costs.
  • The labour hours in the guide can be converted into labour dollars and standard labour costs by multiplying the labour hours for each position by the wage scale for that position.
  • The staffing guide should be based on the performance of good employees.
  • Allowances will have to be made for new employees who have not completed an orientation training period due to their lower productivity.
  • This form of staffing guide is much more useful than industry guidelines that do not take into account the specific factors that affect the productivity in your workplace.
  • It may still be useful to compare your staffing guide to other properties in order to assess how competitive you are.
  • The staffing guide shows the minimum number of staff per peak service period.

Fixed Labour Costs

  • One factor that must be considered before developing a staffing guide is fixed costs.
  • Fixed costs refer to the costs of running the operation that do not vary depending on the volume of business.
  • For many businesses, the cost of the building, heating, lighting, insurance, and other similar costs are fixed.
  • Some labour costs are also fixed.
  • If a restaurant has salaried employees, these costs are fixed and do not change depending on the volume of business.
  • In most restaurants, management positions, including the chef and sous-chefs, are salaried employees.

Variable Labour Costs

  • Variable costs are costs that change based on the volume of the business.
  • Food costs are the most obvious example of variable costs.
  • Labour hours above the salaried staffing levels are also variable costs.
  • As the volume of business increases, hourly labour costs will increase proportionately.

Peak Periods

  • When the staffing guide is used to develop a staff schedule, the supervisor needs to consider the peak periods.
  • Example: If the volume reaches 150 meals, 10.5 labour hours may be needed in the kitchen. An analysis of sales shows that the busiest period is between 6 p.m. and 9 p.m. The supervisor might schedule the cooks so that the first cook comes in from 4:00 p.m. to 9:30 p.m. and the second cook comes in from 6:00 p.m. to 11:00 p.m.

Scheduling Staff

  • Staff scheduling is based on the labour hours needed to meet the projected sales volume.

  • The supervisor also needs to keep an eye on labour dollars by considering whether staff on a lower wage scale could be scheduled.

  • Other factors to consider when developing schedules:

    • Staggered work schedules can be used to meet the demand over peak periods without incurring additional labour costs throughout the full shift.
    • Part-time staff can be used to work short shifts of four or five hours to reduce overall labour costs.
    • Full-time staff are usually used to cover all key administrative positions; sometimes full-time positions can consist of a mix of supervisory and front-line tasks in order to make up a full-time job.
    • Temporary employees can be used to meet labour needs that are temporary in nature such as banquets, employee illness, or vacation relief.
    • Legal considerations such as the requirements of the Employment Standards Act and provisions of the collective agreement must be kept in mind.
    • Staff capabilities should be taken into consideration; some employees may thrive in a stressful dinner rush while others perform well under less stressful situations.
    • Employee’s preferences should also be accounted for in the schedule. Policies should be in place for requesting shift preferences or exchanging shifts between staff members.

  • Policies should be in place for requesting shift preferences or exchanging shifts between staff members.

  • You must have contingency plans to deal with problems. You could have a staff member (or a casual employee) on call in case he or she is needed.

  • You also have to know the capabilities of your staff.

  • When demand is lower than expected, you must know what limitations there are on sending staff home early, while still maintaining the minimum staffing needed to remain open.

  • Of course, you must comply with collective agreements and all legislation that affects your workplace.

  • If you understand the agreements and the Employment Standards Act well, you will know what flexibility you have to adjust to the situations that arise in the workplace.

Staying within Budgeted Labour Cost

  • A comparison of actual to budgeted labour costs can be used to plan future expenses.

  • If your labour costs are higher than desired, you need to find ways to reduce them.

  • One method of analyzing the labour costs is to look at the actual and budgeted labour cost percentage.

  • The projected labour cost percentage is calculated by dividing labour dollars by the projected volume of sales.

  • The actual labour cost percentage is the actual labour dollars spent for a given time period divided by the actual volume of sales.

  • Example 36:
    Based on previous sales figures for a Tuesday night, the manager expected 77 customers on a particular Tuesday evening. The projected revenue for this evening was 1500.251500.25. The manager developed a staff schedule based on the labour hours for 75 meals. The labour dollars were computed by multiplying the scheduled hours for each position by the hourly rate. The total labour cost for the evening was 437.30437.30. The projected labour cost percentage was:
    $437.30÷$1500.25×100=29.1%\$437.30 \div \$1500.25 \times 100 = 29.1\%
    On this evening, the sales were down. Although 76 customers were served, very close to the number expected, the average cheque size was lower. Only 1425.951425.95 worth of menu items was sold. The actual labour cost percentage was:
    $437.30÷$1425.95×100=30.7%\$437.30 \div \$1425.95 \times 100 = 30.7\%.

Improving Productivity

  • One of the best ways to improve productivity is to continually review and revise performance standards.

  • Use the problem-solving process to identify the problem, generate alternatives, evaluate the alternatives, choose the best ideas, and implement them.

  • Some questions you might ask yourself are:

    • Can a particular task be eliminated?
    • Is training needed to improve the skills of staff?
    • Can a task be reassigned to a person who is not as busy (e.g., could the dishwasher assist with some pre-preparation of items early in the shift)?
    • Can slow periods be utilized more effectively to prepare for high-volume times?
    • Does the menu need to be simplified?
    • Do menu or volume changes require changes in facility layout?
    • Would convenience items reduce costs without reducing the required quality?
    • Are the activities of another part of the operation affecting the performance of this department (e.g., the catering department has opened a new conference room some distance from the kitchen which requires food service)?
    • Have there been changes in volume and peak times that need to be considered?

  • After considering all of these factors, you may still not be able to reduce your labour costs.

  • You may have to raise your menu prices to improve the profitability of your operation.

  • Of course, you need to consider the price the market will bear and the prices charged by your competitors before taking such an action.

  • It is often useful to look at both your food costs and labour costs when deciding whether a price increase is needed.

  • If your labour costs are a little higher than anticipated and your food costs are lower, there may not be a problem.

  • Some companies use a figure of 70% to 80% as a target for the sum of labour and food costs.

  • Another strategy is to have lower contribution margins but increase your volume.

  • This makes sense because the more volume you have, the more money is contributed toward meeting your fixed costs of doing business.

Position Performance Analysis

  • Productivity standards are developed by considering the labour hours needed to perform assigned tasks.
  • During a designated observation period, employees are asked to perform their jobs, adhering carefully to all established policies and procedures.
  • They are carefully observed to ensure compliance.
  • This process of analyzing productivity is called a position performance analysis.
  • The employee is observed over several shifts.
  • At the end of each shift, the supervisor completes a report which indicates the name of the employee observed, the meal period considered, the number of meals prepared, number of hours worked, and number of guests per labour hour.
  • The supervisor also records comments on workflow, adequacy of service, problems that arose, etc.
  • Tools like this can help you identify the productivity of each staff member.
  • You may also use this analysis to set goals and identify development options.

Conclusion

  • Food costs and labour costs make up the bulk of the costs in running a successful kitchen.
  • Having a solid understanding of both and how to manage them will be key in running a successful food service operation, whether it be a food truck or a major hotel.