- 8 01 Back Assignment 2 Restaurants No Ti Assignment 2 Change Management Restaurants No Tipping Policy Case As 1 (55.47 KiB) Viewed 61 times
- 8 01 Back Assignment 2 Restaurants No Ti Assignment 2 Change Management Restaurants No Tipping Policy Case As 2 (63.07 KiB) Viewed 61 times
- 8 01 Back Assignment 2 Restaurants No Ti Assignment 2 Change Management Restaurants No Tipping Policy Case As 3 (38.42 KiB) Viewed 61 times
8:01 < Back Assignment 2-restaurants-no-ti... ☺ Employee Response to the Policy Once Brown implemented the policy, current and former employees of his restaurant stated that employee morale dropped considerably, and several people left the restaurant chain. This made the restaurant slow down the "hospitality-included implementation plan to manage the dispute. A former manager at the restaurant stated, "The majority of our strongest people have left". An employee mentioned that once the hospitality- included policy was implemented her per annum income dropped by CAN$ 10.000 from CANS 60,000 to CANS 50,000. Affected workers felt that the changes resulted in more turmoil and demotivation than expected as more than the expected number of employees left the restaurant. This attrition included not only frontline but some of the backend employees as well. Several veteran servers stayed to begin with, after a few months they realized that they could not bear the pay cut and quit. Although employees recognized the benefits, still deduction in pay could not persuade employees to stay back. Some employees believed that their expectations of this change were set much higher, which was difficult to be realized. One of the employees stated, "We were all believing that we were going to be making what we were making before". According to the employee, that was the explicit promise. During a meeting with all employees, Brown stated. The waiters at our restaurants, when we eliminate tipping, will make as much or more, in 75 percent of cases, than they're making right now However, according to employees, this is not what happened. Brown made that promise assuming that by changing the tipping policy, the business at the restaurants would not change, which was not the case. Customer visits instead dropped, and a portion of the servers' wage was directly tied to the restaurant's revenue by virtue of the revenue-sharing program. As revenue dropped, employee wages also declined under the variable pay component. Consequently, within a few months of implementing the no-tipping policy, employees began to leave. Response of Customers Service-inclusive_pricing was not acceptable to mosumers. Not only in their percentage of visits in
8:01 ---- < Back Assignment 2-restaurants-no-ti... began to leave. Response of Customers Service-inclusive pricing was not acceptable to consumers. Not only did their percentage of visits to restaurants decline, but through online reviews, they also expressed their discontent with hospitality-included pricing. The overall rating of restaurants with hospitality- included policy decreased with the policy stated as the main reason. In a survey conducted in 2016, approximately 60% of customers expressed displeasure with the no-tipping policy, which led to an 8 percent to 10 percent" drop in customer visits The fast attrition at the restaurants resulted in hiring underqualified and undertrained staff to fill the gap. At the restaurants where customers came for exceptional service, the management was experiencing service issues. Discussion Questions Using the ADKAR change management model explain why the change management process this restaurant failed? Using Kotter's 8-step change management model explain what the CEO, Steve Brown, should have done differently? 2