Every pizzeria operation includes a manager, assistant manager, and two to five night managers who report to an area supervisor. The requirements for becoming a manager or manager-trainee are not specified. The franchise does not provide formal training for managers and a college degree is not necessary. During the four-year period studied in the case, participants were young managers (ages 24-27), with only one of them having completed college.
The night managers and assistant managers were chosen for their ability to fulfill regular employee responsibilities. Night managers were selected based on job competence, while assistant managers dedicated a two-hour shift during the luncheon period on five weekdays to learn about bookkeeping and management. Those aspiring to become managers remained in that position unless they expressed interest in investing in the business.
style="text-align: justify;">Most of the workers at Perfect Pizzeria were college students, with a few high school students also hired for less demanding jobs. The restaurant was located in an area with limited job opportunities, which made it simple to find enough staff. However, aside from the manager and assistant manager, all employees had part-time positions and received low pay.
The Perfect Pizzeria system implements a standard percentage for food and beverage costs and profits. If the percentage of unsold or damaged food is low, the manager receives a bonus. Conversely, if the percentage is high, the manager does not receive a bonus.
There are various factors that cause the percentage to fluctuate. Due to the manager not being present at the store constantly, certain employees compensate for their wages by taking food for themselves. Additionally, when a friend visits
and orders a pizza, extra toppings are often added. Throughout the day, sporadic bites by 18 to 20 employees contribute to the percentage. There may also be instances where a bucket of sauce is accidentally spilled or a pizza is burned. Occasional mistakes occur when an incorrect pizza size is prepared.
If employees make a mistake or burn a pizza, they need to notify the manager. Normally, employees are accountable for any costs resulting from subsequent mistakes. However, night managers frequently choose not to record the error due to peer pressure. As a result, the store suffers financial loss and the mistake goes unnoticed until the end of the month when the manager identifies a high cost percentage and realizes no bonus will be received.
The manager responded to the situation by implementing changes. Previously, employees were given a complimentary pizza, salad, and unlimited soft drinks after working for 6 hours. However, the manager decided to increase this requirement to 12 hours of work, despite the fact that employees had enjoyed the 6-hour perk for some time. Consequently, when both the manager and assistant manager were absent from the building, employees took advantage of the opportunity. Despite having control over evening operations in theory, the night manager did not command as much respect as their counterparts due to factors such as equal pay with regular employees or similar ages – sometimes even being younger than other staff members.
The pizzeria experienced a rise in indifference, causing a noticeable divide between the manager and the previously close-knit group of workers. The manager opted not to address the issue, believing it would resolve itself.
Dissatisfied employees either resigned or begrudgingly complied with the new guidelines. Consequently, there was an uptick in employee terminations, resulting in financial repercussions for the business; nevertheless, finding replacements posed no challenge.
The manager had to spend more time at the building because of a high turnover rate. This meant they had to supervise and occasionally replace inexperienced workers, which went against franchise regulations. The regulations stated that the manager could only be a supervisor and not participate in food preparation. As a result, employees were not properly supervised with the manager working alongside them.
Due to disagreements between the remaining experienced workers and the manager regarding a specific task, the operation started to encounter difficulties. However, after a two-month period, the manager was able to return to his office and delegate the entire operation to his subordinates. During this time, the percentage of success returned to its previous low level and the manager began receiving monthly bonuses again. With the new personnel being adequately trained, the manager believed that the issues had been resolved and expected conditions to remain unchanged.
The new employees quickly started being influenced by the other employees. As soon as the manager resumed his supervisory role, the percentage began to increase. In an even tougher job market than usual, most employees had no choice but to stay since all free food benefits were eliminated--no free pizzas, salads or drinks. However, the manager couldn't "work behind the counter" anymore due to the appointment of a new area supervisor based in Southville.
The manager attempted yet another strategy to address the increasing percentage issue and secure his
bonus. He posted a notice on the bulletin board, warning that if the percentage stayed high, all employees would be subjected to a lie-detector test. Any individuals found guilty of taking or intentionally wasting food or beverages would be promptly fired. However, this approach failed to achieve the desired outcome as several employees resigned shortly afterwards.
Even prior to calculating the upcoming month's percentage, the manager was aware it would be high. It seems that one of the night managers had informed him about the employees' dissatisfaction with the notice. However, he was not anticipating that the percentage would reach a record-breaking level. This is the current situation.
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