This document discusses productivity and labor costs in restaurants. It defines productivity as the average number of units sold per hour worked and explains why maintaining high productivity through efficient operations and well-trained staff is important to control labor costs. Scheduling employees appropriately based on expected sales volumes throughout the day and week is key to achieving optimal productivity levels between 8-12 units per hour. Motivating employees through positive techniques like training, healthy competition, and communication can help create a productive workforce.

1. I. What is Productivity?
*Productivityisthe average numberof unitssold,perhourworkedforthatday.
*Hours workedincludesanyhoursthatanypunchedinemployee spendspreppingfood,serving
customers,performingcleaningtasks,completingdaily paperwork,andanyothertaskrequiredfor
smoothoperationof the restaurant.
II. Why is Productivity soImportant?
*Productivitygoalsare critical forefficientoperationsandcontrollinglaborcosts. Thisisbestobtained
by trainingyourstaff to be efficientandwell organized.
*A productivitybelow8.0couldindicate thatemployeesare bored,unchallenged,orinefficient. This
encouragessocializationandpoorworkhabits,whichcanadverselyaffectcustomerservice.
*An example of howproductivityiscalculated.
402 (total units) /43 (hrsworked) =9.3 productivity.
III. Why speedis important for productivity
*Fasterservice increasesthe numberof unitsproducedperhour
*A well trainedemployee canmake afootlongsandwichin120 seconds(2mins) fromorderto ringing
up.
*Schedule sothatcustomerscan pay within5minsof walkingthroughthe door.
IV. Scheduling has a direct effect onproductivity
*Staff up for lunchandpeakperiods,andoverlapshifts.
*Aimfor a productivityrange of 8 to 12 per week. Ideal isaround9. Good productivityalsoallowstime
for foodpreparation,cleaning,andothertasksrelatedtothe operationof the restaurant.
*Almosteveryrestaurant(exceptdrive-thru) isdesignedtorunwith1 personduringslowestperiods.
* A useful strategyistouse more shortshiftsinsteadof afew longshifts. Thiskeepsemployees“fresh”
and allowsformore flexibilityonalteringthose shiftsif itisbusierorslowerthanexpected. (Cuttingor
addingtime) Ex.Insteadof two8 hourshiftsschedule two5hour shiftsandone six hourshift.

2. *Stagger whenemployeesarrive fortheirshifts. If the schedule showsthatbetween12:00 and 1:00 you
will sell 25sandwiches,itmaybe that theyare actuallysoldcloserto 12:30 and1:00, meaningthat
additional employeesmaynotneedtostart workat 12:00, but may start at 12:30 instead.
*Openwithone person. If youopenat 7:00 and yourlunchrush goesfrom11:30-1:30, schedule your
openertoworkalone withyour secondpersonto beginat11:00-11:15 rather than havingtwoopeners,
thenstaggeryour additional lunchhelpinasthe numbersindicate. If youneedasecondpersonearlier
to getstockingor administrativeworkdone, have yourthirdpersoncome aroundthe beginningof the
rush,such as 11:30 inthisexample.
*An experiencedandwell preparedemployee canhandle more unitsperhour,comparedtoa newer
employeethatmaynot yetbe efficientandfast. Considerthe experience levelof youremployeeswhen
preparinga schedule soasto not sacrifice customerserviceoroverwhelmalessefficientemployee.
V. Be prepared for the rush: Scheduling and efficient preparation relates to
good service. Thru-Put is productivity’s best friend.
1. Start the day withan organizedrestaurant. Trainyouremployeestoproperlyprepareforthe busier
timessothat customerscan receive quickservice. Doall meal prepinadvance,keepsuppliesupfront
full andup to par levels,cleananddopaperworkduringslowerhourswhile usingefficientclosingor
openingprocedures.
A higherproductivityandmore efficientthru-putcanbe achievedthroughpropermeal preparation.
Before eachpeakperiod,ormeal,yourstaff should:
-Prepare enoughmeatsandveggiestogetthroughthe peakperiod
-Fullystocknapkins,delipaper,gloves,subwrap,coin,straws,cups,andanythingelse needed
duringthe rush.
-Fullystockthe reach-incoolersothatbackup meatsandveggiesare quicklyaccessible.
Do anythingneededtomake yourassemblyline the easiesttooperate andbe quickandefficientwhen
the rush isgoingon.
2. Staff up. Schedule generouslyduringyourbusiesttimes. Customerswanttogetin andout quickly.
You may be able to attaina veryhighproductivityschedulingone ortwopeople duringlunch,but
customersdonot wantto waitthat extra10 minutessothatyoucan maximize productivity. Schedule
so that youcan builda reputationforquickservice duringyourbusytimesanditwill carrythroughto
otherparts of the day.
3. Trainfor speed. Consistentlymotivateyouremployeestobe asquickas possible. Periodicallytime
themand challenge themtobe able tomake a sandwichin60 seconds(fromthe time thatbreadis cut

3. to the wrappedproduct). Create excitementwiththisandencourage competitionamoungyourteam
membersandotherstoresinyour company. Remember:quickdoesnotmeansloppy! Althoughyou
wantthemto be fast,youdo not wantcustomerservice todeteriorate atthe same time.
4. Putthe bestemployeesintheirbestpositionsforoptimumefficiency. If someoneisreallysloppyat
one position(messyveggies),orisslowat that position,place theminapositionwheretheyare quicker
and more successful atproducinga desirable resultforthe customer.
Example:The messyorslowveggie personmaybe areallygoodupseller,ormayhave an outgoingand
pleasantdemeanorwithcustomers. Theymaybe bestonthe registerorpossiblygreeting
5. Have everyone practice “one up,one down”. Thismethodsimplymeanshave eachemployeeonthe
assemblyline assistotheremployeesonthe line thatfall behind. A well functioningfrontlineshould
move quickly,andflowata steadyrate withoutpile-upsorhesitations.
Example #1: The greetergetsan orderfor 4 footlongsandthe veggie personjustfinishedwrappingthe
perviouscustomer’ssandwich. The nextemployee onthe assemblyline(veggieperson)would goassist
the greeterwithbread,meats,orcheese placementonthe largerorderto keepproductionmoving
quicklyandflowingsmoothly.
Example #2: The same customerwith4 footlongsmovesdownthe line withtheirsandwichesforthe
additionof veggies. The thirdsandwich inline istoastedandthe veggie personisstrugglingtofinishthe
secondone to getto the toastedsandwich. Inthissituationthe greeteror“meat/breadperson”would
move overand start the veggiesforthe toasted sandwichuntil the otherpersonisable totake overto
ensure thatthe line keepsupwithflowof completedsandwiches,and sothat the toastedsubdoesnot
siton the line andget coldand unappetizing.
6. Eliminate “Idle Handtime”. Idle handtime issimplywhenanemployeeisidle andwaitingfora
sandwichtocome downthe line. Some commonexamplesof idlehandtime wouldbe:
- the veggie personstandingtherewaitingforthe greetertoputon meatand cheese,
-standingthere waitingforthe toasteror microwave tofinish.
-The registerpersonstandingthere waitingforthe sandwichtocome downthe line. That
personcouldbe usingextratime betweenringingsandwichesto wipe downthingsinthe lobby,
grab replacementmeatsorveggiesforthe people onthe line,orquicklytakinganydishesinthe
lobbyor behindthe line tothe sinkarea. Thispersonshouldalsoalwaysbe moving.
In otherwords, eliminatingidle handtime means everyone’shands shouldbe doingsomethingtoassist
or quickenthe pace of the assemblylineatall timeswhile the rushisgoingon.

4. VI. Now down to the Math: What is Labor percent?
*Labor percentisa calculationbasedonthe percentage of netsalesthatcan be attributedtothe cost of
laborhours. Labor cost (total weeklywages) /NetSales=Labor percent. Whenthispercentage is
addedto the foodcost percentage,the resultingnumbershouldfallinthe range of 50% - 55%.
*Cost of labor / netsales= laborpercentage
*For one hour: $7.25 (wage forone person) /$20.00 (4 unitssoldat $5 a piece) =36.3% laborcost
Productivity NetSales Labor %
12 $60 12.1%
11 $55 13.2%
10 $50 14.5%
9 $45 16.1%
8 $40 18.1%
7 $35 20.7%
6 $30 24.2%
5 $25 29.0%
4 $20 36.3%
Lookingat the example of thischart,if yourrestaurantoperatesat a productivityof 5 insteadof 10,
laborwill be an extra14.5%, whichcomesdirectlyoff the bottomline. Fora restaurantof $6,500
weeklysales,thatisan extra$942.50 a week,or$49,010 a year. Thisis whyestablishingeffectiveand
efficientstaff sothatproductivitycanbe maximizedissoimportanttothe successof your restaurant.
VII. How should we be analyzing labor percent? :Whenthe percentage gets too
high
1. Are youover-schedulingduringyourslowertimes? Only2hrs a day of over-schedulingat$7.25 an
hour for365 daysa yearequals$5,292.50 lostoff the bottomline.
2. Managementshouldbe the most, orone of the most efficientmembersof the staff,andunderstand
howto maximize efficiencyof eachshift. Isthe managerspendingenoughtime onthe frontline to
reduce employee hoursscheduled?
3. Ishighemployee turnovercausingthe needtoexcessivetraininghours?
4. Are employeespoorlyorganized, inefficient,orpoorlytrained?

5. VIII. Productivity andMotivation
*Motivationina work setting isthe processbywhichbehaviorismobilizedandsustainedinthe interest
of achievinggoals. Itis the complex force startingandkeepingapersonatwork inan organization,and
movesthatpersonto action. Whenan individual ismotivated,he feelsenergizedorinspiredtoact,
whereasanunmotivatedpersonfeelsnodrive todoso.
*A productive staff isalsoa well motivatedteamthatworkseffectivelyandefficientlytogether.
*A well motivatedteamiscreatedthroughapositive leadershipand goodmotivationaltechniques.
*Perhaps one of the most effective ways of motivating a team is to ensure that they understand and
appreciate the aims of an organization and are supported by their managers in working towards the
achievement of those aims. There is a range of motivational techniques that can be used to improve
productivity, reduce workplace stress and increase self-confidence.
*Negative motivational techniques- Some managers believe that they can achieve results from their
teams by shouting at them, talking down to them, or by threatening them with disciplinary
action. However, although this fear factor can produce results,the effectswill probably be much more
short-termand will meanthat staff is not focusedonachievingbusinessobjectivesbutrather on simply
keeping their jobs.
*Positive motivational Techniques:
*Encouraging healthy competition.
*Training
People can be taught to become more motivated by showing them how to deconstruct tasks and
challenges,andhowtofeel lessintimidatedbytheirjobroles. Demonstratingtothemhow tocope inthe
workplace can lead directly to improved motivation.
*Enhanced communication
Communicationdoesnotonlymeantalkingtoyourteambut alsolisteningtothem. Itisimportantto
ensure theirunderstandingof company objectivesandtheirindividual jobrolesbutitisequally
importantto showthemthe importance of theirfeedbacktothe achievementof targetsandstandards.
*Targets, rewards and incentives
It isgenerallyacceptedthathavingtargetstoworktowards, as longas theyare realistic,isone of the
mosteffective waysof improvingperformance. Hittingtargetsimprovesmorale andself-confidence but
rememberthatthose whoconsistentlyunderachieve willendupfeelingdemotivated.
Target achievement can be rewarded not only with financial incentives but perhaps with the offer of
increased responsibility or even promotion. Different people are motivated by different things so it is
important to make sure that you offer the right incentives to the right member of the team.
Motivatinga teamis alwayseasierif youfullyunderstandthattheymaynot necessarilybe motivatedby
the same thingsas you. The most effectiveteamsare those thatfeel valuedandsupportedbutalsofeel
that they are progressing and developing through the completion of challenging tasks. If a team
understands company objectives, they are much more likely to want to work harder towards their
achievement. Also,mostpeople tendto respondwell tobeinggiventhe opportunityto make decisions

6. and take on additional responsibilities. Whatever motivational techniques work the best, it is always
important to ensure that your team feels it is making a valuable and positive contribution.