Chapter 5 Managing Productivity and Controlling Labor Costs

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Chapter 5Managing Productivity and Controlling
Labor Costs
Supervision in the Hospitality Industry Third
Edition (250T or 250)
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Competencies for Managing Productivity and
Controlling Labor Costs
1. Explain how supervisors determine productivity
standards. 2. Distinguish fixed staff positions
from variable staff positions. 3. Explain how
supervisors develop a staffing guide.
(continued)
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Competencies for Managing Productivity and
Controlling Labor Costs
4. Forecast business volume using the base
adjustment forecasting method and the moving
average forecasting method. 5. Explain how
supervisors use staffing guides as labor
scheduling tools. 6.  Describe labor scheduling
techniques available to supervisors.  
(continued)
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Competencies for Managing Productivity and
Controlling Labor Costs
(continued)
7. Explain how supervisors use staffing guides
as labor control tools. 8.  Describe the features
and functions of software applications in
relation to scheduling and labor control. 9.
Identify procedures supervisors can follow to
increase productivity.
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Productivity Standards

•   ????? Productivity Standard
• Define the acceptable quantity of work to be
  done by trained employees who perform their work
  according to established performance standards.
• ???? Performance Standard
• Establish the quality of the work that must be
  done.
• Supervisors must balance quality (performance
  standards) and quantity (productivity standards)
  in relation to the size and level of service of
  their departments.

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Determining Productivity Standards
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Determining Productivity Standards
Productivity standards 10 guests per labor hour
38/4 9.5
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38/4 9.5
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Productivity Measurements
  Restaurant servers, bartenders Number of
covers Number of tables turned Average
check Front Desk guest services Number of
check-ins Number of check-outs
(continued)
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Productivity Measurements
(continued)
Housekeeping room attendants Number of rooms
cleaned Quality scores  
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Planning Staffing Requirements

• ???????
• The first step in planning staffing requirements
  is to determine which positions within the
  department are fixed and which are variable in
  relation to changes in business volume.
• Productivity standards can be used to develop a
  staffing guide for variable staff positions.

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Fixed Labor
????????,??????????Minimum labor to operate
facility, regardless of business volume
Department managers Assistant managers
Some supervisors Limited hourly positions
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Fixed Labor

• ??????????? During slow business period, managers
  may consider the following temporary actions to
  reduce labor expense
• ????????
  Eliminate or curtail particular service
• ????????????????? Assign salaried staff
  duties normally performed by hourly employees
• ??????????????? Adjust tasks
  performed by hourly fixed staff

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Variable Labor
 ???????????????? Positions filled in relation to
changes in business volume Servers
Kitchen staff Front desk staff Room
attendants
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Developing a Staffing Guide
 1. ???????? Determine total labor hours (from
previously established productivity standards) 2.
???????? Determine required number of employees
(full-time and part-time) 3. ?????????
Estimate labor expenses (multiply labor hours by
average hourly rate)
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Developing a Staffing Guide
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???90

• Step1 ????????
• Step2 ????????
• Step3 ?????????

25090225 2250.5112.5
860480(min) 480-15-15-30420(??7hr)
70.514 2251416.07(?)
1137791
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??????Forecasting Business Volume

• ?????????????? The supervisor uses the monthly
  forecast to generate initial work schedules for
  employees in the department
• 10??3????????????????? The ten-day and
  three-day forecasts are used to fine-tune the
  work schedules in light of anticipated increases
  or decreases in business
• ????????????????
  Since forecasts directly impact the
  supervisors ability to properly schedule labor,
  many supervisors monitor reservations throughout
  a given day, update forecasts, and make
  modifications to employee schedules as needed.

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??????????
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???????????
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????? Nature of Forecasting-1

• ????????
  First, forecasting deals with the future
• A forecast made today is for activity during a
  future period
• Long-range forecasts are periodically reviewed
  and revised on the basic of new information
  obtained after the forecasts were made

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?????Nature of Forecasting-2

• ????????? Second,
  forecasting involves uncertainty
• Virtually all situations managers face involve
  uncertainty therefore, judgments must be made
  and information gathered on which to base the
  forecast

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?????Nature of Forecasting-34

• ???????????? Third,
  forecasting generally relies on such information
  as historical data on check-ins and check-outs,
  groups histories, weather, and special events and
  holidays.
• ??????????????? Fourth, by their
  nature, forecasts are generally less accurate
  than desired
• Always a variance with actual results

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?????? Base Adjustment Forecasting

• One of the simplest forecasting methods is to use
  the most recently collected data as the basis for
  the forecast.
• 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 managers
  forecast of covers for May?
•  Base (1 5) Forecast for May
• 7000 x .95 6,650 covers

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??????? Moving Average Forecasting

• 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
•  

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Moving Average Forecasting
????? p.159
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??
?? ?????? ??????? lt???gt ??? - ???
1 1,000
2 900
3 950
4 1,050 F1? D1?
5 1,025 F2? D2?
6 1,000 F3? D3?
7 975 F4? D4?
8 1,000 F5? D5?
9 950 F6? D6?
10 1,025 F7? D7?
11 1,000 F8? D8?
12 1,050 F9? D9?
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??????? 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
• ???????? Implement split shifts
• A split shift schedules an employee to work
  during two separate time periods on the same day

(continued)
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Alternative Scheduling Techniques
(continued)

• ????????? Increase part-time staff
• Greater scheduling flexibility
• Also, employing part-time workers can reduce
  labor costs, because the benefits and overtime
  costs generally decrease
• ?????????
  Increase the Number of Temporary Employees
• Many properties keep a file of names of people
  who do not want steady work but like to work
  occasionally

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???? Variance analysis
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???????? Potential causes

• ???????????????????Are the labor standards
  established by position performance analyses
  correct?
• ???????????????How accurate are the forecasts
  used for scheduling staff?
• ?????????????????Are employees performing tasks
  that are not listed in their job descriptions?
• ??????????????????????????????Are there new
  employees who do not perform as efficiently as
  employees did during the initial position
  performance analyses?
• ?????????????Have factors affecting labor
  efficiency changed?
• ?????????????????Are personal or professional
  problems among the staff affecting efficiency?

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Increasing Productivity 1

• The best way to increase productivity is to
  continually review and revise performance
  standards
• Five-step process for increasing productivity by
  revising performance standards
• Step 1- Collect/analyze information about
  performance standards
• ??????????????
• Can a particular task be eliminated?
• Can a particular task be assigned to a different
  position?
• Are the performance standards of another
  department decreasing the productivity of
  employee in your department?

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Increasing Productivity 2

• Step 2 - Generate ideas for new ways to get the
  job done ??????????
• Step 3 - Evaluate each idea and select the best
  approach ?????????????
• Step 4 - Test revised performance standard
  ??????????
• Step 5 - Implement the revised performance
  standard ??????????