How will you analyze the data collected? How will you make sense of the situation at Peppercorn?
This should probably take a majority of the class period, since how the consultants see the organizational issues will, in part, determine how the feedback process will be designed.
Choosing a diagnostic/analytic model is no small issue. There is no evidence in the case that a particular diagnostic model is driving the data collection process (a potential problem), and there are at least two models that would work. First, the consultants could use an individual based model – such as the one described in Chapter 6. For each job at Peppercorn, the consultants could ask what their data reveals about task identity, skill variety, task significance, autonomy, and feedback in the context of Peppercorn’s structure. But this is a more limited perspective and not as good a choice.
Second, and perhaps more relevant in this case, would be an organization-level diagnostic model such as the one presented in Chapter 5.
Inputs: Based on their initial discussion with Drew as well as data from the interviews, we can see that the labor market has gotten very tight. It is more and more difficult to find workers and in particular student workers. This tightened market has forced the dining services unit and Peppercorn to increase the pay rates twice (although with little apparent effect). In a related category, we also know that a union represents full-time employees. It is this labor shortage that is driving many of the dynamics of the case.
The primary customer, students with meal plans, suggests that there is little likelihood that price increases can be used to offset the labor scarcity. On a more general level, we know from data in the interviews that the food-service industry is known for its low wage levels and long and odd hours. Design Components. The observation and interview data provides some information on each feature of organization design. In some cases, there is much data of high quality while in other cases the amount of data (and its credibility) is thin.
Strategy: The mission and goals for the university’s dining unit lays out their purpose and operating goals. There appears to be a broad interest in providing nutritious food, creating a good social and aesthetic atmosphere, and serving the economic needs of the university. The goals reflect this broad interest by addressing customer satisfaction, facilities quality, management excellence, financial management, alignment with the university’s mission, and industry leadership. There is little in the case suggesting that Peppercorn’s strategy is any different.
Peppercorn, according to Drew, is trying address the difficult labor market by providing an enjoyable place to work although the consultants note a certain disconnect between what is said (decentralized and participative) and what is practiced (more centralized, less participative) based on their observations and interview data.
Technology: The overall transformation process is moderately interdependent and fairly low on uncertainty. The key workflow issue seems to be the supply system. Supplies, in the form of food, aprons, cookware, and so on, are ordered through a computer system that isn’t working very well and resulting in frequent outages of different items. Since this process sits at the front end of the transformation process, its ineffectiveness is a key source of problems for the kitchen and service staff. In some way, the whole of Peppercorn is held hostage by this computer system.
Once the raw materials have arrived, food is prepared – sometimes as much as a day in advance – according to meal plans and recipes that are well understood. [Although some of the cooks seem proud of their recipes and interested in creating new ones, do you really want people to be very innovative in this situation? In some ways, this conflicts with the situation.] The prepared meals are transferred to the serving line where customers (students) are provided with their food. One of the consultants notes that there was no portion control at this stage and that a considerable amount of “customization” existed as workers gave students a little more of some things or accommodated specific requests. After the meal, the leftovers, utensils and plates, and trash are fed into the dish room where plates and utensils are cleaned and recycled for use.
Other processes also exist but are also relatively low in interdependence and uncertainty, including order taking, cash exchange, hiring and staffing, and grievance handling.
Structure: A formal organization chart for both the university dining services and Peppercorn are presented in the case. Drew’s role is interesting because he leads two organizations – Peppercorn as well as the Salt Mill – and has a professional supervisor (Larry) that is assigned from the university dining organization. Larry’s relationship with the different employees draws some attention from the consultants and there is a mostly negative perception of Larry and his skills.
The case also points out a rather complex set of employee relationships. There are full time employees (union- represented), full-time temporary employees (a non-union position that has been added to accommodate the problems associated with the declining numbers of student workers), and student labor. The students have their own management structure and supervise themselves as well as the full-time temporary employees (although these employees receive their training from the permanent staff) which has been the point of some contention. At best, it suggests that there may be two standards of work performance at play. At worst, there could be some very divisive resentment over preferential treatment.
Measurement Systems: There is no information presented about how employee work is measured (goals set, performance monitored and feedback), there appears to be no portion control on food served, and no financial information is presented. There is mention of a grievance process, but no indication of grievance activity levels. If the computer system problems are added into this category, there would appear to be a pretty big hole in the sophistication of this system.
Human Resource Systems: The interview data reveals a number of complexities in the way employees are paid through the union contract and the motivational aspects of that system. In the initial interview between the consultants and Drew, he describes how some workers can actually be incented to call in sick, for example. The case also mentions that wage rates have been increased twice in recent months to address the lack of student issues.
Alignment and Effectiveness: Roger reports that customer satisfaction is consistently positive with the one complaint being the heat inside the facility – an apparent artifact of the dining room being built over the heating plant. There is no financial data presented, so we cannot comment on the profitability of the unit. There is, however, considerable data on employee satisfaction. There is a fairly consistent downward trend across many of the employees interviewed, although there is a high degree of tenure among many of the full-time employees. There is also fairly consistent data with respect to tensions between the different types of employees.
Within that effectiveness assessment, can we make any inferences with respect to alignment among the organization design features? The presenting problem in the initial conversation between Drew and the consultants was a “hiring problem” and that has certainly been confirmed, the question is “why?”
First, the strategy for Peppercorn does not seem clear. Other than some sense of “doing the best we can with what we have,” there are no clear goals for the restaurant and no clear sense of why people come there other than they have a meal plan. They are a fairly captive audience and there’s not much in the way of competition for Peppercorn. Does this suggest a lack of external pressure that translates into all the “things seemed pretty relaxed” comments in the case?
Second, the computer system is a big problem, and probably not under Peppercorn’s control. The University dining unit probably programs and maintains the system. There is a potential big black hole here since we don’t know how the system works. The one potential issue here is that it may not be the system; it may be Larry, so that has to be confirmed.
Third, how much of the tension in the restaurant is the result of the structure where students supervise adults. Understanding the rationale for this approach and what the alternatives are would be a fruitful conversation.
Fourth, and related to the strategy– There appears to be very few measurement systems. How do employees know if they are doing well or poorly?