Food Cost Control - Bonus Calculations

Pizza Shop Talk The Think Tank
1

I’m preparing to put a bonus system in for our shift managers. We use portion cups / scales on everything we do, and we have very good systems in place for food cost control. I would like to tie a part of their bonus to food cost percentage just to be sure they are using the portion cups and cutting waste like they are supposed to be. There will be other things tied to the bonus (labor costs, cash control, etc.) but I am a little confused on food costs. I have always felt like once the system is in place, and used properly, the biggest mover of food costs is the price I’m paying from my vendors. Is there much else to be done that will affect food costs that drastically? I don’t want to penalize my managers for rising costs. I can’t raise my prices every week, so food costs % are going to creep until we raise prices again. How do you tie food costs into your manager’s bonus? Do you base it off of the variance from actual to ideal food costs, or do you strictly base it off of a certain percentage?

Thanks in advance.

Also, are there any other areas that should be tied into the bonus? Remember, this is for shift managers, and not a store manager. They are paid hourly, but this bonus will allow them to make a little less, or a little more than what they are currently making by how well they do.

2

This will only help you on one item, but I have cheese usage built into my bonus program. We take a daily cheese inventory and compare to what the usage should have been. They need to be within 2% of target for that portion of the bonus. Wasted pizzas do not count toward the target, so it only takes a couple of wasted pizzas per day for them to blow it.

That eliminates the problem of the cost of cheese swinging around.

3

We do a daily inventory of all items except paper. Our POS also contains ideal food portions (and therefore costs) for every item on the menu.

we pay a bonus based primarily on sales over that period but with various qualifiers such as:

a) labour below the agreed rate
b) food cost no more than 0.5% above ideal.
c) service above the agreed rate

We do change thse things (in advance) on a regular basis in line with business needs.

Hope this helps