© 2007, Educational Institute Chapter 5 Managing Productivity and Controlling Labor Costs Supervision in the Hospitality Industry Fourth Edition (250T or 250)

© 2007, Educational Institute 1 Competencies for Managing Productivity and Controlling Labor Costs 1.Explain how supervisors determine productivity standards. 2.Explain how supervisors plan their staffing needs and develop a staffing guide. 3.Forecast business volume using the base adjustment forecasting method and the moving average forecasting method. (continued)

© 2007, Educational Institute 2 Competencies for Managing Productivity and Controlling Labor Costs 4.Explain how supervisors use staffing guides as labor scheduling and control tools. 5.Describe the features and functions of software applications in relation to scheduling and labor control. 6.Identify procedures supervisors can follow to increase productivity. (continued)

© 2007, Educational Institute 3 Standards Productivity Standard—Quantity of Work by Trained Employees Performance Standard—Quality of Work

© 2007, Educational Institute 4 Productivity Measurements Restaurant: servers, bartenders, buspersons Number of covers Number of tables turned Average check Front Desk: guest services, bell staff Number of check-ins Number of check-outs Housekeeping: room attendants, housepersons Number of rooms cleaned Quality scores

© 2007, Educational Institute 5 Fixed Labor Minimum labor to operate facility, regardless of business volume: Department managers Assistant managers Some supervisors Limited hourly positions

© 2007, Educational Institute 6 Variable Labor Positions filled in relation to changes in business volume: Servers Buspersons Kitchen staff Front desk staff Room attendants

© 2007, Educational Institute 7 Developing a Staffing Guide Determine total labor hours (from previously established productivity standards) Determine required number of employees (full-time and part-time) Estimate labor expenses (multiply labor hours by average hourly rate)

© 2007, Educational Institute 8 Nature of Forecasting Deals with the future Involves uncertainty Relies on historical data Always a variance with actual results

© 2007, Educational Institute 9 Base Adjustment Forecasting In April, the Fun Family Restaurant had 7,000 covers. The unit manager expects business in May to decrease by 5% due to cutbacks in marketing and promotional efforts. What is the manager’s forecast of covers for May? Base (1 – 5%) = Forecast for May 7000 x.95 = 6,650 covers

© 2007, Educational Institute 10 The Dinner Deli uses a moving average time series approach to forecast dinner sales. If sales for the past four weeks were $4,000, $6,000, $5,500, and $5,000 what would the sales forecast be for the upcoming week? Moving Average = Activity in Previous 4 Periods 4 Periods Moving Average = $4,000 + $6,000 + $5,500 + $5,000 4 Moving Average = $5,125 Moving Average Forecasting

© 2007, Educational Institute 11 Alternative Scheduling Techniques Stagger regular work shifts Greatest number of employees during peak times Fewest number of employees during slow times Compress work week Four 10-hour days may better meet demands during peak season/times (continued)

© 2007, Educational Institute 12 Alternative Scheduling Techniques Implement split shifts Two separate shifts on the same day Increase part-time staff Greater scheduling flexibility (continued)

© 2007, Educational Institute 13 Increasing Productivity Collect/analyze performance standards Generate ideas for new ways to get the job done Evaluate each idea and select the best approach Test revised performance standard Implement the revised performance standard