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Defying conventional wisdom that employees prefer praise over pay

Defying conventional wisdom that employees prefer praise over pay

“In study after study, the No. 1 factor that foodservice employees cite relative to job satisfaction and voluntary tenure is being recognized and thanked by their supervisor; they rank higher pay or more money sixth on the list.”

The next person you hear repeating that ridiculous statement at a seminar, in a book or during a training session must be called to task. Demand they cite their sources or document the findings. If they can’t, presume they sound like a manure salesman with a mouthful of samples.

The dirty little secret of the foodservice industry is the fact that we turn over employees more often than a line cook turns over pancakes at a 10-cent, all-you-can-eat pancake breakfast. Wait, check that. It’s not a secret, which makes it all the sadder. We all know that 100-percent turnover among hourly employees is considered award-worthy in most chains and “only” 50-percent turnover among hourly crew is considered downright ethereal and best in show. Foodservice trainers, conference planners and HR executives rush headlong to these 50-percent turnover companies to study best practices and discover secrets of “employee retention” that they can then apply to their own organizations. But think about this for a second. Fifty-percent turnover means you are consistently losing every other employee every single year. And that’s newsworthy? Valuable? Worth copying? How sad, truly, is that? In many other industries supervisors would be sacked for such numbers, not rewarded.

Industrywide turnover among hourly team members in 2009 averaged about 138 percent across segments. This number—plus or minus 10 percent—has been fairly steady for the past 20 years. What’s most surprising is that foodservice companies and industry organizations just grimly shrug it off and chalk it up to “being the nature of the beast.” They blame high turnover on “a tough labor market” or “tight margins” or the obligatory “manufacturers’ costs.” All of these things may indeed come in to play, but the biggest reason never addressed is that we simply don’t pay enough for performance.

When execs hear the fairy tale of recognition trumping pay, they admonish an already overworked management team to show more appreciation for their hourlies. Maybe take them bowling. If pay is truly a nonissue like many of us believe, then why do foodservice executives and managers shake their heads daily and bemoan the fact that their trained associates routinely abandon the brand for another restaurant paying 25 cents more per hour across the street?

It’s considered insubordinate and unconscionable, when in fact this chronic behavior should be prompting these same executives to find better ways to optimize systems and profitability in order to find more money to improve the associates’ and managers’ pay and education. Who wouldn’t prefer leading a team that’s focused more on the customer’s needs than what the competitor’s paying?

Granted, high turnover among hourly team members will always be problematic for any workforce indexed to the minimum wage, but we’re constantly applying Band-Aids to the problem instead of addressing the real and root causes of turnover. And I realize it’s a complex challenge; anyone who’s read my columns over the past decade knows I don’t believe that better pay alone will magically solve everything. If that were true we’d all be working on king crab boats in the Arctic Ocean.

You have to combine better pay with strong leadership and electric training. Stars don’t work for idiots. I get that. But stars don’t work for jack either. Why do foodservice companies who pay their hourly teams more (and train them better) attract high performers and experience less turnover? Consider Chick-fil-A, Starbucks, In-N-Out and Costco, among others.

I recently challenged the Sullivision.comresearch team to find any documented research that backs the belief held by every foodservice manager and executive I’ve ever met: that foodservice hourly associates prefer recognition and appreciation over higher pay. Long story short: The research simply does not exist. There are manufacturing employee studies from the 1960s that sort-of support this notion, but we could find no research specifically related to foodservice hourly team members—especially from the class of 2010—that either supported or rejected the belief that praise trumps pay.

So we contacted 16 different foodservice brands we work with across the QSR, full-service and fast-casual segments and asked for permission to conduct an e-mail survey with a select number of their hourly team members to gauge how they like to be recognized for performance. The 768 workers that responded revealed the following top eight ways they want to be recognized for their work: 1) Increased hourly compensation; 2) Bonus; 3) Personal thanks from a supervisor; 4) Additional learning/training opportunity; 5) Promotion with increased compensation; 6) Time off; 7) Recognition companywide; 8) More responsibility. You can see more on the survey at

What’s most interesting to me about this feedback is that matters of pay and compensation rank Nos. 1, 2 and 5, recognition comes in at No. 3 and a yearn-to-learn trumps a promotion or time off. This feedback clearly runs counter to what we’ve been told for years by consultants and speakers who have cherry-picked unrelated elements of Gallup or university research to proclaim that employees don’t really care all that much about money; all they need is love.

So here’s where the end of this column leaves you: your turnover will either 1) get better; 2) get worse; or 3) stay the same. Settling for numbers two and three is a fool’s game, getting better is the only sane option. So once you’ve made that choice you face another: to do something or to do nothing.

To do something means finding ways to pay better and train more. And if your choice is to do nothing, please then ask yourself how that decision affects your customers, your brand, your bench strength, your shareholders and your ability to attract the most talented team members in the future. After all, if the best people are working for you, it ensures that the best people are not working against you.

I know this column will probably make some owners and operators angry and upset; business is tough enough without someone suggesting higher pay and more training dollars are the solution to the turnover epidemic. If you’re wondering whose side I’m on, that’s easy: the customer’s. When you have happy employees you have happy customers, and happy customers buy more and come back with their friends.

If you’re truly uncomfortable with this column, ask yourself if that discomfort is a result of my misrepresenting the truth or because the artificial sense of contentment experienced when a familiar fairy tale is told looks different in the cold, harsh, light.

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