While the tough economic environment has forced Texas Roadhouse to slow its unit growth, officials of the 335-unit casual-dining chain say they refuse to cut back on their programs to keep employees engaged and motivated.
Practices such as pre-shift “alley rally” gatherings and in-house competitions—for example, the employee deemed the best meat cutter each year could win $20,000—as well as the $500 in “fun money” managing partners are given monthly to host barbecues or take staffers to ballgames remain in the budget because they are crucial to the chain’s success, said Mark Simpson, senior director of legendary people.
“We believe that if we love our employees, they’re going to love our guests,” he said. “We spend a lot of time, energy and money on fun, and we haven’t cut back on that.”
Such soft-dollar investments in employee engagement can not only impact a company’s bottom line, they can better position an organization to weather the storm gracefully, say researchers of the Hay Group, a management consulting firm.
Hoping to gain insight into the ongoing recession’s impact on employees, the firm’s research arm, Hay Group Insight, conducted surveys of about 1 million workers among 41 client organizations around the world, including some foodservice and hospitality companies. Researchers then compared the results with similar surveys done during better times, before the market meltdown of late 2008.
The results, released in August, were “potentially surprising, but also encouraging,” said Mark Royal, senior consultant with Hay Group in Chicago.
More than three-quarters of the companies surveyed showed net increases in their employee opinion scores after last fall’s market meltdown—a time when one might think the rounds of layoffs, pay cuts and doing more with less would sour an employee’s willingness to go the extra mile.
“It showed that, clearly, there are opportunities to enhance engagement levels,” despite the challenges of today’s economy, said Royal.
In addition, the companies with the highest employee engagement scores, who also enabled their workers to channel their extra efforts productively, also showed the highest revenue growth, customer satisfaction scores and employee retention rates, the researchers found.
Royal said employee engagement scores may be up during this recession in part because those who are employed are grateful to have a job at all.
However, Royal said the responses went beyond that, indicating the employees were more committed, and more willing to contribute and exceed expectations than before.
The findings are key to the restaurant industry, especially in light of research by Philadelphia-based PeopleMetrics that has consistently linked employee engagement within the foodservice industry with bottom-line results.
Employee engagement is key in “creating a better guest experience, which in turn builds customer engagement,” contends Frank Rowe, vice president of business development for People-Metrics, a customer and employee research firm.
Now, more than ever, restaurants across the country are looking for ways to build customer loyalty with more than just discounts and value pricing.
Rowe points to restaurant companies like Louisville, Ky.-based Texas Roadhouse, which PeopleMetrics recently ranked No. 1 among restaurant companies that employ best practices to keep employees engaged.
Every year, for example, Texas Roadhouse gathers about 1,000 frontline employees, managing partners, regional operators and vendors—and their spouses—for a four-day motivational conference that costs the company roughly $2.5 million, said Travis Doster, a company spokesman.
In contrast, this year many companies were concerned that such incentive meetings could be seen as excessive when so many workers have been laid off. Some cancelled their meetings or at the very least took their corporate names off the hotel marquis where such events were taking place.
Texas Roadhouse, on the other hand, inflated a 25-foot armadillo on the Ritz Carlton in San Francisco where the meeting was held in April.
“We wanted to tell everybody that we’re rewarding our folks and we’re proud of it,” Doster said.
The practice of recognizing and showing respect for good employees is common among organizations in the Hay Group survey that demonstrated high employee engagement scores, Royal said.
Other “best practices” include:
Maintaining open and honest communication with employees. “Organizations should let employees in on the plan. Employees will have a hard time embracing a possible future if they don’t know what that is,” said Royal. “Clarifying what an organization is evolving toward—even if the changes are uncomfortable—is critical.” Providing capable leadership. Employees need to believe they’re “playing for winners,” said Royal. Maintaining quality in customer focus. This is particularly important for customer-facing employees in the restaurant industry who are the first to feel it when guests are unhappy, said Royal. Those workers have to feel their employer supports a culture of customer service. Creating development opportunities. Organizations have to provide opportunities for growth and learning, he said. This can be a challenge during today’s difficult times, when training resources may not be available and growth might be on hold, limiting opportunities for promotion and advancement. If cuts must be made, Royal said the best organizations make them surgically in a way to create development opportunities for key contributors. Compensation and benefits. These might be difficult areas for companies at a time when so many are cutting labor costs, but Royal said the key is communicating a sense of fairness in compensation at the very least.
“Look beyond pay and benefits to other types of rewards, like development, quality of the work environment or growth opportunities,” Royal said.
When better times return, such companies will find the investment in their employees will pay off, he added.
“Organizations that are attentive to engagement issues set themselves up well when the economy recovers to hang onto their best people,” Royal said.