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The human side of food and beverage cost controls


Many articles have been written, and will continue to be written, on the topic of controlling food and beverage costs in private clubs. There is no lack of information on procedures for purchasing, receiving, storage, issuance, preparation, portion controls, serving, staffing and labor scheduling. The subject has been analyzed, scrutinized, sliced and diced by the top experts in the field, to the point where there is not much left to say.

Except for this: All of these treatments have missed the most important ingredient in cost controls—people. The human factor. The traditional approach has stressed a controlling atmosphere of strict procedures and measurement devices, assuming that employees cannot be trusted to do the right thing on their own.

Anyone who has looked at this subject from the human perspective understands that, if employees are not internally driven to control costs, no amount of pressure from external controls will be effective. This seems like an obvious point, but clubs often tighten the screws, in the form of more stringent procedures and controls, instead of taking the time to build employee loyalty and a sense of personal responsibility.

Why do clubs (and many other organizations) lean toward procedures and away from people?

First, building loyalty takes time. It also requires the personal involvement from management. Today’s club managers and department heads are so swamped with meetings, discussions and other administrative chores that they often lose sight of the need to spend time with their employees—all of their employees.

Second, some managers haven’t yet realized that, long term, people don’t respond well to heavy-handed control tactics. Used over a long period of time, these practices will drive away the best performers and leave the club with the rest – often a group of underperformers with nowhere else to go.

Here are some fundamental approaches used by the most successful of clubs to increase employee loyalty and personal responsibility:

  1. Acknowledge that employees are the club’s most valuable asset and treat them accordingly.
    This point seems self-evident. Yet, this simple measure of human respect is often cast aside—replaced by layers of impersonal procedures, rules and guidelines. The bottom line is simple: employees who feel valued are more likely to adhere to the club’s rules and regulations than those who feel unappreciated. 
  2. Treat all employees with dignity and respect.
    Another obvious point, but countless stories are told of management’s insensitivity to basic employee needs. Angry tirades by the prima donna executive chef, scheduling favoritism by the dining room manager, an unwillingness to address difficult people issues by the clubhouse manager—all lead employees to lower their respect for management as a whole. As respect declines, so too goes concern for controls.
  3. Encourage employee involvement.
    There are two good reasons for adopting this practice. First, involving employees in operational discussions and decisions makes them part of the solution, rather than part of the problem.  Second, employees know things management does not. Many good ideas and suggestions will surface from employees if they are offered an opportunity to participate.
  4. Reward productivity and performance with higher wages.
    Compensation politics in a club can destroy morale. Often, certain individuals are unjustly rewarded for longevity or “because the members like them” (even when they are insufferable to colleagues). This type of favoritism sends a negative message to other employees, who are often performing at a higher level, but paid less. Weeding out special cases may be the best thing for a club, as it focuses on fair and equal treatment of all employees.
  5. Expect higher employee productivity and lower costs.
    A common complaint of employees in private clubs (as well as in other industries) is a lack of clear work objectives from management. Often, employees are unclear as to what is expected of them. Communicating specific expectations is critical to creating a productive dialog with employees and involving them in operational discussions.

    In addition, it may be a good idea to raise performance expectations. In fact, behavioral research with groups has repeatedly shown that the mere expectation of better performance can produce dramatic—and lasting—improvements in actual performance. Simply asking more of employees can reap good results, but only when management’s appreciation of employee value is strong.

None of this is to say that procedures, rules and regulations are unnecessary. Controls are needed. But the effectiveness of those controls is tempered by the loyalty of the people expected to comply with them.  Treat your employees with respect, encourage their involvement, reward them fairly and expect more of them. Those are the human keys to cost control success.