Employee Profit Sharing

[UncleNicksPizza]

I am a firm believer of seeing if anyone has had any successes or failures with a concept before attempting it.

As I am sure is the case with lots of us, we are struggling to find good quality help. Here in Florida, minimum wage is currently $10/hour, with a $3.02/hour tip credit.

We start our in-store at $12/hour, with a clear list of “mastery” tasks given to them in which they can go up to $14/hour within the first year. Our driver’s start at a split pay of $10.00/hour in store and $7.00/hour on the road. They also have a list of “mastery” tasks given to them that they can raise their in-store rate to $12.00/hour within the first year.

Our shift leaders start at $14.00/hour, our assistant manager at $17.00/hour, and our General Manager at $18.00/hour (paid weekly as salary). Managers are also eligible for a bonus plan (10% of profits for GM, 5% for AM).

With local retailers, like Target, Wal Mart, Publix, and national fast food chains like Chik Fil A, McDonald’s, etc, starting at $15/hour, we just can’t compete. We do not have near the volume that these fast food places do, and need more staff per sales $ than the retail places do.

Since I can not compete on pay rate, I am looking at trying to compete in a different way through an employee Profit Sharing program. Something similar to my GM / AM bonus, but wherein a # of employees share from it. As an example 10% for In Store Employees / 5 In Store Employees = 2% per employee.

I work a full time career in law enforcement and own the business as something to leave my family and give my children when they get older. So my goal isn’t to make tons of money.

Does anyone currently have a program like this in place, or ever tried one? If so how is it working, or how did it work? I would love anyone else’s input from a different perspective.

My goal with the plan would be to get employees with the same ownership work ethic that if they work harder, and watch the costs, they will make more. The whole “succeed together or fail together” philosophy.

 

[Jimbolini]

After looking up your store (based on user name I assume?), I see that you’re pick up and delivery only?

Our situation is a little different, as I have seating as well but here is what we do.

We hire mainly 15-17 year old types, for many this is a part time first job. We pay $11.00 per hour plus split all tips across the board. (Management gets more) They average $15.50 per hour.
This tends to make everyone feel apart of a team. The faster the kitchen goes, the more customers we see , etc.

It’s not as formal as a profit share, but it seems to work for us.

In my experience, the younger kids don’t care so much about money as they just want to be treated with respect. (We have hired from most of the places you mentioned that seem to burn through kids quickly)

We try to make all the shifts fun, and make sure everyone is involved. We have employee of the month, rising star and other food based incentives.

I am not sure if this helps you at all, but I wanted to show you a different perspective.

 

[MSG]

I have used profit sharing in many different environments before coming to pizza. I am a big believer in it. My #1 and #2 managers are on a program and it is very effective.

The “problems” with profit sharing for hourly workers are:

1. The number of hourly workers FAR exceeds the number of managers. Therefore, when you try to divide the profit sharing money among that large group, each worker gets a pittance and it ends up being seen as an insult instead of a bonus.
2. Hourly workers typically have little control over profit. So many of the expenses are out of their hands that the profit sharing bonus has little correlation with their day to day activity instead of being a motivator it becomes an entitlement to them.
3. Many hourly workers are not motivated by money. They complain about it, but in the end, most are not motivated by it. The ones that are motivated by it work their ways up to management.

Before trying profit sharing, I suggest trying contests or performance bonuses. Determine the things in your store you’d most like to see improved like upsells, 5 star reviews, hitting labor targets, passing health inspections, whatever. Then build a contest around achieving one or more of those things. Give out things like Amazon gift cards as the prizes.