TO: Richard Purvis
FROM: Chris Adam
Managerial Leadership Consultant
Richard Purvis the owner and manger of the franchise devoted considerable time and effort in order to make the franchise into a successful business. First he was doing multitasking where he was responsible for carrying out the duties of the owner along with managing the rest of the operations. The place had the ambiance with good music and its own specialization in food items. He was providing good quality food. The business was doing well that is why he needed extra support so he hired McCrathy. However as McCrathy started working it was observed that the two managers had different approach towards work and dealing with their subordinates.
When Richard hired McCrathy he paid him a salary along with a percentage of the amount he would save from the operating expenses. So if he saves more he would get extra money. Richard wanted to increase the efficiency of the work. He wanted that limited resources should be used with less wastage that is why he used this strategy with McCrathy. He followed FW Taylor’s approach of increasing productivity and reducing inefficiency. Wage levels were based on productivity known as the piece rate. Workers were paid on hourly basis so the more effort you put into your work the more you will be paid. It was a fair days pay for a fair days work.
McCrathy came and implemented his own plan. He did this in order to make more money individually. The more he was able to cut costs it was going to benefit him. In this plan he did not consider that how de motivated workers are due to his policies and changes and how such practices adversely affected the business. He was only working for himself and did not consider the long term goals of the business. His new economy program reduced the quality and quantity of food to the customers. He was making a compromise on the quality in order to forcefully push costs down as a result the business is losing their loyal customers who are complaining and are disappointed with the kind of service they get.
The kind of business Richard is in, the role of his employees is very important because it is a service oriented business. Happy employees tend to try their best in order to keep a happy customer which is very important as employees come in contact with them all the time. McCrathy failed to keep the workers motivated. Previously when they used to work with Richard they used to contribute to the businesses which lead towards its growth in seven years, but now in McCrathy’s time the sales of is decreasing. The female waitress’s service is not satisfactory and the male clerk’s appearance is sloppy. This shows that they were not very keen to work at the Parlor anymore as McCrathy was not taking care of them as he should be doing as a manager Apart from monetary returns there are other factors too that are required in order to keep the employees satisfied such as categorized by Maslow as physical needs, safety needs, social needs and self esteem. The way McCrathy used to treat his employees shows that there was no appreciation or positive reinforcement at work. He was rude to his employees as he fired one of the short order cooks for being late only for five minutes. Moreover McCrathy knew that the work load is more. Therefore he should be hiring more people but he would over burden the existing employees without giving them enough time to rest. The level of frustration among the employees reached to the level that Ron, one of the best short order cook’s quit his job just because they could not stand the autocratic style of leadership pf McCrathy who would impose duties on them without any consideration on their part.
Purvis and McCrathy were both leaders but of two different kinds. Purvis seemed to be more of paternalistic style of leader. He would do what is best for the business, the decision making will be in his hand but he would take the feed back from the employees too so that they feel that they were important to the business and that their contribution matters. He kept them motivated and understood his employees, the employees were happy and they liked them. Ron was with the franchise from the last five months. They used to work together as a team. It is due to this reason that the business grew so much in the seven years time.
McCrathy was a clear cut autocratic leader. He would take his own decisions without any consultancy from anyone else. If he wanted to fire an employee he would do it right there. He would set certain defined rules and expect them to follow them strictly. He only had one way communication. Workers under this kind of situation would stop taking any initiatives of being creative or showing some interest in work especially if they are not satisfied with their boss and work and feel pressurized.
It is high time that you realize the mistake you have made. You have not hired the required person for this job who is working for his own incentive. The kind of work McCrathy is doing very soon people will stop coming to this franchise and the existing workers will quit their job as job satisfaction is the most important thing for the employees. Sales are already falling, customers are complaining, the quality of your food has fallen including your specialty superior ice cream sundaes and sodas. If you consider the situation of your business during your time then it has changed completely but in a negative way.
You can either join again to take the charge of your own work before it gets worse. You can not rely on any incompetent individual to come in and ruin the hard work you have done in the past seven years and the name of your franchise and give business to other competitors so easily. You need to change McCrathy because his way of working is not suitable for this kind of work and he has failed to fulfill his duty even if you train him or keep him your workers don’t like him. It’s recommended that you hire someone else if you don’t want to join yourself. The new employee should preferably have an experience in running a franchise or a similar business. You should not give him authority to take all the decisions. You do the major decision making of hiring, firing and pay scale. Based on your policies he should run your parlor. You need to keep an eye on him else you could end up being in the same situation.
If I was in your situation I would have joined again and tried to revive the situation and bring things to normal by hiring some new individuals at this time and expecting quick results would be unfair. Right now the parlor needs experience and that you have. After things are smooth, I will hire a manager I will train him and make him work with me for a certain time period so that he gets used to the way things are handled here and then give him the responsibility but even then the core issues and areas need to be discussed with me before being finalized. Most importantly, I believe no compromise should be made on the food quality, quantity or employees. That is if I were in your place, but at the end of the day the decision is yours.
September 20, 2008