Managers Incentives

Pizza Shop Talk The Think Tank
1

I am in the process of hiring a manager and would like to hear from anyone on incentive programms yo have in place.

If anyone has something that could be emailed it would be great.

Email: pizzapizzazz@iinet.net.au

Anything would be great.

I currently looking at performance based bonuses based on Cost control, Wage control, store cleaniness, staff performance etc.

Thnaks
Dave

2

Here is what I posted on a similar thread a while back:

My manager’s bonus has two components:

The first half is based on MY perception of how smoothly things are running. It maxes out at an additional $2 per hour and I pay it on each pay period on straight time hours only… i.e. the most he can get is $160 for a two week pay period. My expectation is that I would never be paying less than $1 per hour. If I was, I would be looking to hire a replacement. In the last year I have paid as little as $1.50 but mostly pay the $2.

The other half is based on profit, not sales. I need him focused equally on providing good service and quality that improves sales and on food and labor cost. A manager can cost you a lot more money quickly on blown costs than they can on missed sales. I take 5% of sales for myself to begin with and then pay out 20% of profit to managers as profit bonuses. In our market, we have offseason months where we loose money. Those months have negative bonuses that offset profitable months, but the bonus is paid monthly. The net effect is that we pay sizable profit bonuses during the busy season and none during the slow season. A big profit bonus for a month would be around 2K to as much as 3K with the general manager getting about 40% of it and the assistant managers splitting the other 60%.

My GM’s gross earnings last year were around 43-44K and with benefits cost me about 50K. I used to pay them a salary but I found that some of my managers could get the job done in 35 hours leaving me with wages for assistant managers to cover shifts. Now I pay hourly plus bonuses and just let them have the overtime when we are busy.

3

Does anyone offer a GM or assistant manager a percentage of gross sales during their shift with a minimum?

4

I offer my guys a bonus scheme like this:

Bonus is earned provided that during the period they meet all of the following criteria:

  • Labour hits 25%
  • Actual Food is no more than 0.5% above the ideal food cost on my POS
  • I carry out inspections on a regular basis (using an agreed format) and they need to achieve the agreed levels
  • Service hits an agreed level (if your POS allow you to do this).

If they achieve all of this things then they earn a set amount based on the average sales over the period in question:
for example

10,000 = $100
11,000 = $150
12,000 = $200

and so on.

You can vary the amount as required. The bonus scheme is laid out in an agreement and can be withdrawn at any time etc.

Hope this helps.

Wiz

5

I run a number of stores and this is how I break it down:
Based on sales volumes, I determine a percentage of sales
35% based on food goal, determined by POS system, with variance for waste
35% based on labor goal
20% based on inspection scores
10% based on sales building efforts, including upselling

I think it’s important to incentivize managers based on factors that they can control. Your profitability depends so heavily on those controlables that it’s best to keep their focus there. Why let them stress over a $200 repair, all the while blowing it on labor or food? Remember this: often as much as 70% of your sales are spent at the store level on food, paper, supply and labor expenses. Most other costs are somewhat fixed.

6

Our shift managers get a weekly bonus.

When labor is under our target, we give them a percentage of those savings. That share can be reduced or increased according to delivery over-limits, kitchen make-times, and drawer over/shorts. And they lose bonus money when I get a bad check back that doesn’t have the ticket number written on it (as this is something that currently upsets me).

Before the last minimum-wage hike, this amount could be substantial. Now… not so much. Even so, our turnover rate on shift managers is pleasantly low.

Our General Manager(s) also gets a monthly profit-sharing bonus.

The percentage share they get goes up depending on the level of annual sales. There are no real incentives/disincentives tied to this other than having to listen to the owners in a meeting. More of a retention thing than anything else.

Also, a bonus structure allows for “seasonal” operations to pay more when the sales are high and keep labor-costs in check when times are lean. Something we have to concern ourselves with in a college town.