Case Study: The River Walk Caf

The River Walk Cafe is a casual 250-seat restaurant located in downtown San Antonio, Texas. The Cafe serves three meals and has a brisk bar business at night. Although there are some slow periods during the year, business is generally steady because of a loyal local customer base and a constant supply of tourist and convention customers.

The General Manager is Gary MacAfee. He's been with the Cafe a little more than six months. The previous General Manager left for another business opportunity. After finishing his undergraduate degree in business administration, Gary spent seven years working his way up the front-of-house and back-of-house management ranks in a large national restaurant chain. This is his first General Manager position.

Gary took a very conservative approach when he began his new position. He knew he could improve the overall quality of operations and increase revenues. However, he also knew that if he acted too quickly and made a lot of changes early on, his staff and customers might be resentful and resist.

The first item on Gary's agenda was to get a sense of the Cafe's operating procedures and general work climate. To do this, he worked directly with the kitchen and waitstaff, performing the same tasks, duties, and responsibilities they performed. He felt it was important to gain the employees' respect by showing he wasn't afraid to get his hands dirty. In addition, Gary would learn firsthand about the Cafe's operations. He also started a file that contained a log of customer and staff comments, interactions between the staff and customers, sales and revenue figures, and any information he could use to gain a comprehensive understanding of the current working conditions and subsequently use as a basis for making necessary changes. After a couple of months, he had compiled a long list of items he thought he could use as a basis for improvement.

One of Gary's biggest concerns was the relationship between the kitchen staff and the waitstaff. He recorded numerous problems and tensions. To begin with, he noticed that the servers spent a great deal of time interacting intensively with the guests. However, he also noticed that members of the waitstaff were quite terse and demanding of the kitchen staff. Servers complained that it took too long for food to come out because the cooks wasted their time garnishing plates. However, the cooks complained that many times the food waited too long on the hot counter and "died" before it was picked up by the waitstaff because the servers were "schmoozing" with the customers. Gary also found that when the waitstaff did occasionally bus tables, they returned the dish and glass trays without stacking them in their proper places. The kitchen staff complained bitterly, noting that the kitchen was crowded enough without trays of dishes and glassware carelessly stacked in valuable prep space.

To address this problem, Gary decided to conduct a meeting with the waitstaff and inform them of his findings. Gary felt that it was appropriate to discuss his concerns with the front-of-house employees first, then determine how to involve the back-of-house employees. Initially, the meeting wasn't very insightful. Needless to say, the waitstaff were not happy about being told of Gary's "perceived problems" with the operations. In fact, they felt as though he was pointing the finger at them. Thus, they didn't provide Gary with much information to identify the true nature of the problems, let alone determine ways of making the situation better.

However, when Gary asked the waitstaff about their satisfaction with specific aspects of work, particularly pay, they became very vocal. Sarah, a full-timer who had been with the Cafe for two years, stated that in comparison to other servers in the area, the Cafe waitstaff made considerably less. As the discussion ensued, it became clear that this issue was a big sore spot with all of the waitstaff. They suggested that the primary problem was that The River Walk Cafe was one of only two casual restaurants in the downtown convention district. Because most of the other restaurants were upscale, the waitstaff at the other establishments earned considerably more in tips because they had higher check totals.

Sarah also affirmed Gary's observation concerning the "extensive" time spent with customers and stated that the waitstaff felt it was important to "get to know your table." However, Sarah said that the time is necessary in order to upsell the guest to increase the check total. Steve, a part-time server, concurred: "It's important to understand your customers. If we didn't spend as much time as we do, we couldn't provide the kind of service they expect. Besides, upselling and providing good service makes you happy and brings the customers back. Isn't that what you want?"

After much thought and consideration, Gary decided it was necessary to revise the compensation system for the waitstaff. He felt that it was necessary to provide some additional monetary incentives for the waitstaff, but not at the expense of the Cafe's overall profitability. The new system must provide a mechanism for increasing the Cafe's overall revenues. In addition, the waitstaff must take on some additional responsibilities so that the kitchen staff could accommodate the need for an increase in table service efficiency. As such, the waitstaff were required to garnish their own plates and bus their own tables.

Gary increased the waitstaff's base wage 25 percent, from $2.90 an hour to $3.60 an hour. In addition, he developed incentives for outstanding individual and group performance. Free end-of-shift meals would be awarded to the server who turned the most tables and to the individual who had the highest sales for the shift. In addition, the entire waitstaff would receive a biweekly bonus if the Cafe's overall sales reached specified levels. Gary felt that this new system would alleviate the pay inequity problem and promote a more cohesive, motivated front-of house staff. Moreover, he believed that this new system would have a positive impact on the bottom line.

The waitstaff was very pleased with the new system. They openly expressed their appreciation about receiving a wage increase. In addition, they realized that they didn't have to "schmooze" with the guests in order to increase their individual and overall sales simply turning more tables by providing more efficient service had a positive net result. Finally, the waitstaff seemed to enjoy their new responsibilities, and they even had informal contests to see who could come up with the most creative garnishing designs.

However, although the waitstaff was happy with the new system, the kitchen staff expressed a great deal of anger and resentment. The kitchen staff felt betrayed. Henry, one of the line cooks, summed it up by stating, "We work just as hard as they do, but you've ignored our efforts. It's not fair!" Gary realized his new system had perhaps created more problems than it solved.

1. Did Garys new incentive system solve his primary problem? Why or why not?
2. Will it help the Caf achieve its goal of quality customer service? Why or why not?
3. What advice might you have for Gary?

SOURCE: HINKIN R. TIMOTHY