Case Study 1 : Goal Setting, Performance Management, and Rewards

No More Dawdling Over Dishes

Andy Davis was proud of his restaurant, The Golden Bow. Its location was perfect, its decorationwas stylish, its custom generous and famous. When he first took over the business a year ago, Davis had worried that the local labor shortage might make it difficult to hire good workers. But he had made some contacts at a local college and hired a group of waiters who worked well with customers and with one another. The only problem he still had not solved was the dishwasher.

At first Davis felt lucky when he found Eddie Munz, a local high school dropout who had some experience washing dishes. Davis could not afford to pay a dishwasher more than $4 an hour, but Eddie did not seem to mind that. Moreover, Eddie appeared to get the dishes clean. But he was so slow! Davis originally thought Eddie just was not quick about anything, but he changed his mind as he observed his behavior in the kitchen. Eddie loved to talk to the cooks, often turning his back on the dishes for minutes at a time to chitchat. He also chewed desserts off of dirty plates and sprayed the waiters with water whenever they got near him. The kitchen was always a mess, and so many dishes piled up that often two hours after closing time, when everything else was ready for the next clay, Eddie would still be scraping and squirting and talking. Davis began to wonder if there was a method to Eddies madness: He was getting paid by the hour, so why should he work faster? But Davis did not like having a constantly sloppy kitchen, so he determined to have a talk with Eddie.

Davis figured out that Eddie had been making $28 on his reasonably efficient nights and then met with Eddie and made him a proposal. First, he asked Eddie how soon he thought he could finish after the last customer left. Eddie said an hour and a quarter. When Davis asked if he would be interested in getting off forty-five minutes earlier than he had been, Eddie seemed excited. And when he offered to pay Eddie the $28 for a complete job every night, regardless of when he finished, Eddie could hardly contain himself. It turned out he did not like to work until 2:00 a.m., but he needed every dollar he could get.

The next week, a new chalkboard appeared next to the kitchen door leading out to the dining room. On top it read, "Eddies Goal for a Record Time." By the end of the first week, Davis had printed on the bottom "l." Davis began inspecting the dishes more often than usual, but he found no decrease in the quality of Eddies work. So on Sunday, he said to Eddie, "Lets try for an hour."

A month later, the board read "42 minutes." The situation in the kitchen had changed radically. The former "Eddie the Slob" had become "Eddie the Perfectionist." His area was spotless, he was often waiting when someone came from the dining room with a stack of dirty plates, and he took it as a personal insult if anyone found a spot on a plate he had washed. Instead of complaining about Eddie shooting them, the waiters kidded him about what a worker he had become, and they stacked the plates and separated the silver to help him break his record. And the first time Eddie got done at 12:42, they all went out for an hour on the town together.

Case Questions:

1. What did Andy Davis do to change Eddies behavior?

2. Which elements of total quality management and performance management did Andy Davis use?

3. Could Davis have used a different system of rewards to get the same results from Eddie