Human resources: too often a stepchild

Nation's Restaurant News, Nov 12, 1990 by Charles Bernstein

Human resources: Too often a stepchild

Robert Farrell, founder of Farrell's Ice Cream Parlours and chairman of Portland, Ore.-based Newport Bay seafood restaurants, has a constant vision: "Our dream is to get everyone who walks in our restaurant to say, 'I'll be back.'"

How can that dream be implemented? Here are some golden nuggets as presented by dynamic motivator Farrell at Nation's Restaurant News' Multi-Unit Food Service Operators (MUFSO) conference in Los Angeles last month:

* "Welcome people to your restaurant with gusto. Don't say, 'How many?' Just say, 'Right this way, please.'"

* "Emphasize the basics. Hot food on hot. Cold food on cold. Remember that we're in business to take care of the customer."

* "The customer is always the boss. Make sure to give the 'extra pickle' fre whenever the customer asks for it."

Utilizing these principles, Farrell -- still the ultimate entrepreneur -- has managed to reduce his company's annual turnover rate to 5 percent for managers and 30 percent for all restaurant employees.

Some chains and independents come close to emulating Farrell's employee stability, but many suffer from an immense turnover -- a constant revolving door of perhaps 200 percent annually, including hourly employees. One estimate says that two-thirds of all foodservice customers will never return to a restaurant because of inferior service.

Employee turnover and customer dissillusionment are inextricably linked. When restaurant employees are not motivated or encouraged by the management, they will look for a company where they will be recognized. Meanwhile, the workers who are not motivated vent their frustration on customers.

Unfortunately, too many companies have reversed the order of Farrell's priorities. First and foremost, he advises, take care of the customer; then take care of the employee. Finally, make a profit (as a result of the first two).

Operators somehow assume that profit comes first and that this means the other two points will somehow automatically occur. Such an attitude does not suddenly start at the unit level. It begins at a chain's headquarters and directly relates to the mistaken notion that people needs are somehow less important than operations, marketing, finance, strategic planning and a bevy of other functions.

Clearly, people and their motivation are the prime ingredient of success in any aspect of the restaurant business. Much of the problem stems from a feeling that employees are the most expendable portion of financial considerations in trying to bolster hard-hit profit margins.

People come last rather than first in such an equation.

One glance at the salary structures and titles at foodservice chains goes a long way toward proving this thesis. Almost invariably, the salaries of human resources directors are lower (sometimes by far too much of a margin) than those of operations, marketing and financial executives.

When it comes to travel for recruiting, meetings or conferences, human resources directors are usually allotted the least money. With such thinking, it is no wonder that a lack of recruiter professionalism has at least occasionaly been noticeable on collge Hotel and Restaurant Management campuses. It can be directly traced to a lack of importance placed on human resources functions.

Vice presidencies are rare for human resources directors but quite common in other categories. Whether the title itself is of real importance, the thinking behind it is significant. Its absence represents a downgrading of human resources.

Not so long ago, there were virtually no human resources directors. "Personnel director" was the accepted title. In an effort to upgrade recruiting and retention, the title "human resources director" emerged.

That title alone is not enough. It seems to be given in lieu of the higher pay that this position deserves. Nevertheless, companies can legitimately point out that their human resources directors are often less experienced than chiefs of other departments and do not merit the pay received by other executives who have been in the business twice as long.

This is indicative of the way the human resources director position is downgraded as either a "beginning executive" spot or as the last stop on the trail for longtime veterans rathern than being regarded as the hub of the action.

There are some notable exceptions. Among companies that give human resources the proper recognition and set a fine example are ARASERVE, with Karl Snepp; General Mills Restaurants (Red Lobster and Olive Garden, with Frank Ruble; Hardee's, with Edna Morris; and Taco Bell, with Bill Bensyl. They are all senior vice presidents.

Meanwhile, Charles DiLapi has just been moved up from a vice president to senior vice president of human resources, planning and administration for Al Copeland Enterprises, New Orleans. Consolidating multiple duties is one way of bestowing senior vice president recognition.

Companies often prosper when the president emphasizes the critical importance of human resources and preaches this doctrine constantly. Yet in other cases some of the finest human resources directors remain just that, never even being given a vice president's title.