Measuring and Managing Employee Turnover at Tastee Max Restaurants

By Nelsen, Bonalyn J.; Walker, Patricia A. | Journal of Critical Incidents, Annual 2010 | Go to article overview

Measuring and Managing Employee Turnover at Tastee Max Restaurants


Nelsen, Bonalyn J., Walker, Patricia A., Journal of Critical Incidents


Introduction

Ronda Garvey, assistant manager of a Tastee Max restaurant located in the food court of one of upstate New York's busiest malls, pored over the turnover statistics for her restaurant. In 2008, average employee turnover within the nine-unit quick service restaurant chain was 66.3 percent--well below the industry average of 120 percent (U.S. Bureau of Labor Statistics, 2009). However, the average annual turnover rate for Ronda's restaurant was 122.7 percent, approximately double the turnover rate of other Tastee Max stores. Ronda chafed at the knowledge that her restaurant was known as the chain's "bad store" due to frequent employee problems and high turnover, and she was determined to improve her unit's performance. Ronda had several ideas about how the turnover problem could be addressed, but knew that obtaining support for her ideas would not be easy. Noting that the chain's employee turnover was about half the industry average for quick service restaurants, Tastee Max's corporate managers had been relatively unconcerned about the problem. Key to the success of any initiative taken to curb turnover was gaining the support of corporate management. Ronda wondered, "What actions should I suggest for lowering employee turnover, and how can I make a business case for my ideas?"

Company History

Tastee Max was a family restaurant chain established in upstate New York in 1955. The original store was a small refreshment stand featuring ice cream and hand-made root beer; over time the menu expanded to include hamburgers, hot dogs, hot sandwiches, and French fries (see Appendix: Table 1, page six). The restaurant was known for its uncompromising standards for excellent product and service quality. For example, choice cuts of beef were ground daily in every store for hamburgers; only all-meat hot dogs with natural casings were used; and the restaurant's handcrafted root beer was made on site. Tastee Max won a devoted following among customers, who were known to drive long distances to purchase a Tastee burger or frosty mug of root beer. Over the next five decades, Tastee Max opened a total of nine restaurants (called units or stores by company insiders) across upstate New York. Six units were standalone restaurants, while the remaining three--including Ronda's unit--were located in the food courts of area malls. All restaurants featured a menu consisting of hamburgers, hot dogs, hot sandwiches, cold salads, French fries, ice cream, and soft drinks.

In 1985, a group of local businesspeople purchased the chain, but continued to operate the company using the original name, menu, and business concept. Tastee Max's company culture continued to be based on nine core values handed down by the restaurant's founder:

* The Golden Rule: Always treat customers and co-workers as you would like to be treated.

* Customer Focus: Our success is directly tied to how customer focused and attentive we are. Always remember that the customer is the reason we are here.

* Professionalism: We honor co-workers and ourselves by prohibiting the use of profanity in the workplace.

* Work Performance: Promotion and pay raises are based on work performance, teamwork, and customer service skills rather than seniority.

* Investment: Investing money in our facilities is important; investing in employee training is ten times as important.

* Diversity: We create a work environment in which everyone can do their best regardless of race, religion, or sexual orientation.

* Caring: We exhibit care and concern for our fellow workers.

* Cost Control vs. Product Quality: Controlling costs is important to our business success. However, we will never comprise product quality for the sake of saving money.

* Simplicity: Our systems and procedures must be simple to permit consistent, flawless execution.

Employment Practices At Tastee Max

Tastee Max restaurants were open for service from 10:30 am-9:30 pm (9:00 pm in stand-alone stores) Monday through Saturday, and from 11:00 am-6:00 pm on Sundays.

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