“To Keep Employees, Domino’s Decides It’s Not All About Pay”  Problem: store mngrs in region leaving every 3-6 months, turnover rate among non-managerial ees as high as 300%/yr Average turnover for most large and midsize cos ~10- 15%  For fast-food chains, rates as high as 200%/yr for hourly ees not unusual Costs Domino’s ~$2,500 each time hourly ee leaves, ~$20,000 each time store mngr quits  Some cos addressing problem w/ higher starting wage Starbucks pays more than minimum wage, turnover rate for hourly ees is 80-90%

“To Keep Employees, Domino’s Decides It’s Not All About Pay”  Domino’s willing to try all sorts of tactics, except paying hourly ees significantly more “You can’t overcome a bad culture by paying people a few bucks more.”  Believed that to attack turnover must focus on store managers – hiring more selectively, coaching them on how to create better workplaces, motivating them with promise of stock options and promotions  Research indicated most important factor in store’s success wasn’t neighborhood demographics, packaging, or marketing, but quality of store mngr  Hoping to select better mngrs, Domino’s implemented new test – 30- minute online evaluation of financial skills and mngt style  Candidates then receive training on weak points  Stock options to be granted to ~15% of store mngrs, based on criteria such as sales growth and customer service  Addition to profit-linked bonuses already in place, which historically average ~30% of mngrs’ compensation  Store mngrs’ base salaries start at ~$32k  New CEO re-named HR dept “PeopleFirst”  Source: Wall Street Journal, 2/17/05

Steak ‘n Shake  Steak ‘n Shake has reduced its turnover from 220 percent to 148 percent Due in part to linkage of turnover to mngt incentives Mngt turnover 29 percent, general mngt turnover 16 percent Customer satisfaction up, drive-through times down  Source: Workforce Week, 9/4-10/05 (