Perfect Pizzeria Restaurants is a chain of 125 pizza establishments around the country with headquarters in Madison, Wisconsin. There are three locations in Bloomington, Indiana however they have financial and employee problems particularly at the location near the Indiana University campus.
Each location has one manager and two shift leaders. The employees are mostly college students, with a few high school students performing the less challenging jobs. Nearly all of the employees, with the exception of some managers, are employed part-time and most earned only the minimum wage or slightly above.
To address the financial problems, the Perfect Pizzeria manager’s compensation plan was changed to now being based on food and beverage costs and profit targets. If the percentage of food unsold or damaged is very low, the manager gets a bonus. If the percentage is high, the manager does not receive a bonus; rather he or she receives only his or her normal salary. Their compensation is also reflected in the restaurant’s profit figures which also must reach a certain level for the manager to receive a bonus. Thus the managers knew the criteria being used for their evaluation and therefore where to focus their efforts.
These profit and loss figures often fluctuate. Knowing the manager cannot be in the store 24 hours a day, some employees make up for their low paychecks by helping themselves to the food. When a friend comes in to order a pizza, extra ingredients are put on the friend’s pizza. An occasional slice or two of pizza by the 18 to 20 employees throughout the day/evening at the break table also raises the percentage figure. An occasional bucket of sauce may be spilled or a pizza accidentally burned. Sometimes the wrong size of pizza may be made.
In the event of an employee mistake or a burned pizza by the oven person, the
expense is supposed to come from the individual employee. Because of peer pressure, the night manager seldom writes up a bill for the erring employee. Instead the establishment takes the loss and the error goes unnoticed until the end of the month when the inventory is taken. That’s when the manager finds out if the food loss percentage is high and if there will be a bonus.
Over time these loss figures increased. To address these problems at the Bloomington location, the manager took retaliatory measures. Previously, each employee was entitled to a free pizza slice, salad, and all the soft drinks he or she could drink for every 4 hours of work. Management decided to raise this figure to 6 hours of work before any free food. Since the employees had received this “free food after 4-hours” benefit for a long time they frequently ignored the rule and took advantage of the situation whenever the manager was not in the building. Therefore, the Perfect Pizzeria manager decided to create an assistant manager position which could more closely supervise the shift leaders. Each shift leader was now responsible for a team of 3 – 4 employees who were given specific responsibilities for a particular job such as counter, delivery, food preparation, etc.
Employee apathy grew within the pizzeria. There seemed to be a further separation between the store manager and his workers, who were once a closely knit group. The manager made no attempt to alleviate the problem, because he felt it would iron itself out. The employees who were dissatisfied would quit or they would be content to put up with the new regulations. As it turned out, there were many employee resignations. The manager had no problem in filling the vacancies with new workers, but the loss of experienced personnel was costly to the business.
It didn’t take long for the new employees to become influenced by the more experienced employees and the unsold/damaged food percentage remained high. Then the manager took a bolder step. He eliminated all the benefits that the employees had – no free pizzas, salads, or drinks. The manager tried
still another approach to alleviate the rising unsold/damaged food percentage problem and maintain his bonus. He placed a notice on the bulletin board, stating that: if the percentage remained at a high level, a lie detector test would be given to all employees. All those found guilty of taking or intentionally wasting food or drinks would be immediately terminated. This did not have the desired effect on the employees, because they knew if they were all subjected to the test, all would be found guilty and the manager would have to dismiss all of them. This would leave him in a worse situation than ever.
As the manager sat in his office listening to his beloved Cub’s baseball game, he analyzed the month’s profit/loss statements and knew things were not going to be good. What he did not expect was that the percentage was actually increasing from previous months.
Another problem developed at the Bloomington campus location when Jennifer, a recently hired night shift counter clerk filed a complaint with the regional manager. She stated in her complaint that she was always required to work the late shift and Bill the night manager was becoming a bit “too friendly”. In fact her complaint stated, the only way she could get off from work earlier than other employees was if she would agree to meet Bill on their nights off at Hoosier’s, a popular college student club down the street from Perfect Pizzeria.
Additionally, there was a formal complaint from a group of male employees that only the attractive female workers were being promoted to assistant managers or shift leaders even though the men had worked at the restaurant longer than most of the promoted women.
The case assignment questions follow…
PERFECT PIZZERIA – CASE QUESTIONS
(Please type your responses by listing the question number/letter and then your answers to the questions.)
1. List two different managerial functions/activities the manager has performed. Then give specific examples or evidence from the case that explains these two management functions the manager has performed. 4. points)
2a. Which of the managerial skills was the manager best at? Explain. 2b. Which of the managerial skills did the manager need to improve? Explain. (4 points)
3. List and/or give examples of four (4) different forces or factors from Perfect Pizzerias’ external environment. Then give a specific example of how each of these could have an impact on Perfect Pizzeria. Please be specific.(4 pts.)
4a. The case mentions that some employees put extra ingredients on their friends’ pizza or take a nibble or two of pizza during their shift. Please discuss whether you feel this is ethical and your reasons why you feel this way. (2 pts.)
4b. What actions could an organization take to prevent these potential ethical violations from happening based on the concepts in the textbook? Explain by applying these ideas to this case situation. (4 pts.)
5. Review the organizational approaches to managing diversity from Chapter 6. Then discuss or give an example of how you would apply two of these concepts to address the complaints of the male employees regarding the unfair promotions? Be specific. (4 points)
6. Give an example from the case of a poor management action and discuss two (2) specific ways you would correct the situation if you were the manager. (3 points)