Employee Empowerment Case Study: TGI Fridays

Employee Empowerment Case Study: TGI Fridays Major shifts in business activities in the recent years due to globalizations have taken Large (LEs) and Small Medium Scale Organizations (SMEs) either National or Multinational towards an intense competitive environment. To respond to these global challenges organizations are now working differently as compared to past and last but not the least the competitive advantage that a company obtains is through its customer service activities. As The cost of attracting a new customer is five times bigger compared to the cost of retaining a current customer (Hart et al, 1990). When an organization is not able to provide the desired satisfaction to customers, the customer becomes aggressive and besides leaving the organization service becomes a tool to disengage customers in his domain. When a company fails to provide a service, the dissatisfied customer may provide negative word-of-mouth. (Chakrapani, 1998) claims that 100 dissatisfied customers cost a company 1600 to 2500 potential customers. To retain the customers it is of paramount importance that the employees of an organization are in line with the organizations objective with regards to the successful operation and in this regard todays managers make sure to convince employees that their personal interests are in agreement with the goals of the organization. (Hellriegel et al, 2005) explained that in todays battle for excellent employees, management has to offer more than high pay to win employees trust and motivate employees. As very aptly discussed by (Latham and Gary, 2004) that the most difficult aspect of being a work team leader is motivation of team members. Work teams may be more successful in achieving organizational goals if their members are empowerment to do their jobs. 2. SIGNIFICANCE: For achieving organizational success employee empowerment and performance are at the core with regards to these concepts. Job satisfaction amongst employees talked about in relation to employee empowerment and contextual performance. Ugboro and Obeng, found that in an organization empowered employees demonstrate job satisfaction at higher levels in contrast in organizations where employees are not empowered. (Ugboro and Obeng, 2000) When the team leader demonstrates the appropriate disciplines Employee motivation can be an easy task the simple disciplines encourage employee motivation to happen naturally. Motivation, whether it is self motivation or employee motivation, is the trigger to act. The competitive business market nowadays stresses on swift solutions as there a shortage of time in making decisions. To succeed, todays complex organizations require the collaboration of multiple followers (Yukl, 2008) managers at all levels who may assume a leadership role contingent on situational demands. As a result, empowerment has become a big slogan in numerous organizations world over. By setting the shared vision and common goal creates an environment in which other employees can control themselves i.e. empowered whether they acting for the objectives of the organization or not. As Kotter said that the vision makes the work more important to employees that envisioned by the common vision, which at the same time stresses their own values (Kotter, 1990). In order to get people move in the same direction that leader chooses, he/she needs to align them rather than organize them (Kotter, 1990). Empowered employees are more willing to serve the customers; his in turn quickens customer needÂÂ ´s responses which in turn result in customer satisfaction (Bowen et al, 1992). Empowered employees self-efficacy levels increase as they are in a position to evaluate the best approach to perform tasks. (Gist et al, 1992) In a Service organization the employees are of primary significance in view of the fact that they are the ones who are the face of the organization and the way they react and interact with the consumers is an indicator to the customers about the organization. The better the service and quality interaction the customer will have the more positive image will be portrayed also since service organizations are empowered as they have to make on the spot decisions this may prompt a negative image also as its a 2 way process. 3. RESEARCH OBJECTIVE: 3.1 AIMS: The idea of the study is to streamline the corporate objective through better quality management by having empowered employees. Whether it is fashion, hospitality, airline or the food industry, consumers first and foremost demand is quality. And this is not area specific. At the end of the day, companies are attracting consumers. However, the underlying challenges facing companies are the maintenance of quality to enhance consumer base. 3.2 RESEARCH QUESTION: For this study the company chosen is TGI Fridays restaurant. The purpose of this research is to ascertain the extent to which TGI Fridays restaurant practices employee empowerment in their organization, and how it impacts on service quality and customer satisfaction. The nature of the food service industry touches directly on the satisfaction and experience of the consumers. This uniqueness may account for the closer scrutiny and monitoring to ensure that certain standards with regard to employee empowerment that would otherwise have been voluntary in other sectors are observed. In this paper, we will delve into the details of employee empowerment in the restaurant business. The core study will revolve around TGI FRIDAYS Quality Management through employee involvement that will ultimately help the brand reach greater heights. According to (Strauss et al, 1998), the research question is a statement that identifies the phenomenon to be studied. It tells the readers what the researcher exclusively wants to know about this subject. How does TGI Fridays empowering of employees impacts on the quality of service and customer satisfaction in their restaurant? 4. Literature Review: 4.1 Total Quality Management: With the advancement in communication technology, transportation and other technologies the world has shrunk into a global village. Products and services developed in a country are now widely accepted in other regions of the globe as well. Many companies like TGI Friday have been developing marketing strategies to fulfill the need, in an increasingly globalized market, for several years. TGI Friday is one of the companies that are being recognized by and whose brand names are familiar to most of the people in every region of the world (Austins Radisson Hotel, 2006) Quality has different connotation to different people. Employees tend to think like their peers and think differently like those at other levels. This suggests that to infuse quality in the organization will be much easier if it is embedded across the board. Many Japanese companies have demonstrated a high perfection of product quality, reliability and customer service through TQM (Garvin, 1988). Such goals require continuous improvement procedures to be established within the company. The relationship between market share, profitability and quality has always been studied. According to Buzzell and Gale (1987) one factor above all others-superior quality drives market share and profit is virtually guaranteed. Companies that are committed to Total Quality Management, apply it in all areas of the organization, because customers are both external and internal functions to the business. Quality can not only reduce cost, it also helps in getting the differential advantage. As we can see in the following illustration, there are two types of quality: quality driven at customer and conformance to organizational quality standards. The Quality Circle is as follows: Price Advantage Customer-Driven Quality Market Share Profitability and Growth Customer Value Customer Attributes and Design Specs Specification Quality Productivity Lower Cost Lower Cost of Quality Investment in Improved Quality Figure 3.1 Quality Circle, Source: Joel E. Ross, (1996). Total Quality Management; Text, Cases and Readings. Second Edition. Total Quality circle implies that the customer is the top priority for all business decisions. It takes into consideration the satisfaction of customer as a key determinant of success in the long run. Sometimes business decisions lead to the demise of an entire enterprise when quality is shown the door, while compromising on customer requirements. According to TQM theory the best way to improve organizational output is to continually improve performance (Dale, 1996). The phenomenon of Total Quality Management is no more another statement for organizations. It has become a reality. In the cut-throat corporate world, companies find themselves in hot water if they compromise on quality, consideration the fact the consumers now have more alternatives at their disposal. 4.1.2 Buzz Word Quality: Every organization has a set of standards and beliefs that they adhere to. Quality is the buzz word in the modern day marketplace. Every organization claim to infuse the best quality in its products and services. In our daily lives, we distinguish different products and services as excellent, average or mediocre. The precise definition of a quality product or service is that it provides customer more than what they were actually looking for at a prescribed price. According to Crosby, quality is the outcome of a carefully constructed culture. This has to be the fabric of the organization. (Crosby, 1988) Organizations operating in modern markets call for an exceptional quality in their products and services. In the case of restaurants, the initiative is that products and services must be readily available to customers. Essentially, organizations focus on the concerns of customer needs, through a well developed mechanism (Kotler, 1991). A good management at a restaurant will instill value that will lead to the creation of admirable products and commendable service, which in turn fulfills customer expectations and satisfies them. Quality is really an attitude built on a perception. Its not the product or company itself. The product is sold by the company. (Aaker, 1991), asserts that the brand of that product is bought by the consumer, predicated upon the consumers perception that the brand he or she buys of a product differs sufficiently from another brand of the same product to warrant choosing one particular brand over another. And, by the way, warrants paying the price for it. Customers look beyond the functional benefits of a restaurant to the overall experience it offers. Johnson stated that people stay in relationships for two major reasons: because they want to and because they have to. (Johnson, 1982) This recommends that service loyalty is influenced by satisfaction and interpersonal bonds. The interplay of these two sets of influences impacts on operational, marketing and human resource management strategies, including the nature and form of empowerment best matched to the service offer. (Cowell, 1984) claims that different organization provide different service features, which in the long-term impacts the operational management, marketing offer to customers and the way that front line employees are managed. 4.1.3 Consumers Charge Quality: Consumers tend to associate quality with price. But a new Cornell study found out that higher price tag may create a more positive view of products, but consumers may not necessarily purchase them. (Lowery, 2009) Some studies support the idea that higher price leads to a more superior quality some case examples are studies by, (Dodds, et al 1991; Gabor, 1988 etc). On the other hand, other studies have found that a high price may not always be related to the perceived superior quality. (Peterson 1970; Peterson and Jolibert, 1976). Such inconsistent findings have prompted the conclusion that a general price perceived quality relationship does not exist (Zeithaml et al, 1988). It is very much clear that quality cannot alone be associated with the price tag. It all depends on the users preference, the availability of different alternatives and the situation that compels the consumer to use the product/service. Many customers seek their prescribed branded services when it comes to restaurants. The branded organization meets customers security needs by making the service offer precise and by delivering a standardized service constant with customer expectations. At the same time many customers are looking for some confirmation of their individuality. (Holpp, 1990) asserts that the problem with the delivery of services is that it is delivered at the customers interface. If a problem exists, it is already too late. The subtle aspects to service and the heterogeneity of services pose difficulty for both customers and organizations supplying services to them. TGI Fridays provides a service which creates a sense of social connection to others. The brand also offers its customers a prospect to deal with the ambiguity felt by many service consumers. Thus, the customer can personalize the experience and knows what to expect. The following extract from an article reinforces the aforementioned argument. Lori Voth asserted that the biggest problem with most of restaurants is that the food looks awesome in the menu, or on TV, billboard, but once it gets delivered to your table, your impression fades away. However TGI Fridays manages to do it perfectly every time. Not only do the photos and descriptions make your mouth water but the actual meal always lives up to its promise. This is one restaurant where you can judge something by its cover, or picture. 4.1.4 Quality Infuse Loyalty: It has been observed that some restaurants have a more loyal following? Why is that people are more attracted to it? Because, the experience is worth remembering. From the very first interaction with the staff, an impression is made. This feeling creates an impression in the mind of the customer. Many restaurants and TGI Fridays in particular identify the value of customer service. Loyalty is an essential part of doing any business. No business can survive without establishing a dedicated client base. Studies have shown that companies that are rated high by their customer can charge close to ten percent more, than those rated poorly (Sonnenberg, 1989). For managers, motivating a group of employees is not a straightforward task. Each employee is a different and unique individual with dissimilar personalities and attitudes. Surprisingly enough, in spite of its evident importance to all businesses, relatively little is known about it. Experts have struggled to define exactly what being a loyal customer means, and too little has been made in determining what factors lead to customer loyalty. So, although customer loyalty is considered the back-bone of business, it still remains a mystery. To be truly effective and be able to repeat business, a brand must fabricate an emotional connection with its customers. And this is what the managers strive to achieve. Emotional branding is connected with the wisdom of brands and leads to an excursion filled with precious hints, ideas, and lessons from the customers. How to infuse brand loyalty in customers and address the trenchant constituents of branding as a product of perceptive thinking is another challenge for the managers. Haddadj (2003) believes that to create an effective workplace in order to motivate employees to perform well is very much in the interest of organization. Managers pivotal role in initiating transformation in a restaurant is to succeed in improving organizational performance. 4.2 What is Employee Empowerment? A pleasant and professional environment helps in the development of the capabilities of employees. On the other hand meager staff quality can be very expensive for any business. Empowerment is defined as the capability of employees to exercise judgment and discretion in their work and to contribute more fully in decisions affecting their work (Potterfield, 1999). Change, regardless of its magnitude is a challenging exercise. In case of employee empowerment, the challenge becomes even bigger as a high level of unpredictability is involved. In any organization, employees are the assets. Human Resource is vital to a corporations growth and prosperity is gaining and retaining competitive advantage. Therefore a motivated and contented workforce is more likely to achieve on many fronts. Loyalty and commitment from the staff cannot be controlled. In Harvester Restaurants, employees work in autonomous work groups without the direction of an immediate supervisor (Ashness et al, 1995). Organizations tie staff loyalty and commitment to its policies and actions. Therefore the management should deal with this issue prudently. (Fedor et al, 1989) concede that the employees who find the work more creative will react less to criticism. Total quality management and the strive for zero defects places issues of quality at the center of every managements reflection. Employees who are empowered are in greater control (Conger et al, 1988). Employee empowerment has its fair share of criticism too. (Purser et al, 1998) in particular are wary of practices, calling it pseudo-empowerment (p. 132). They assert that it is simply putting a new face on an old scheme. Many authors believe it is more self-directed. (Hitchcock et al, 1995) note that the practiced empowerment is a status rather than a process of actively participation. However, those who promote this concept are of the view that it works and is related to the organizations performance. (Piore et al, 1983) believe the organizations will gain superior competitive advantage by focusing on employees as assets and by removing unnecessary levels of management. There are four different, but overlapping managerial motives for introducing empowerment (Lashley, 1995). These are empowerment through participation, through involvement, through commitment, and empowerment through delivering. Each of the aforementioned forms is applied differently with the nature of empowered given to the employee. Organizational theories also attest to the fact that the fit involving business strategies and organizational characteristics is a key determinant of organizational performance (Lorsch et al, 1973). Many authors like (Barry, 1993) say that empowerment is a universally defined term. The idea of empowerment is to engage the employee in different aspects of the service operation. The empowerment model of (Lashley, 1997) is as follows: Source: (Lashley, 1997) 4.2.1 Empowerment Self-Actualization: Abraham Maslow has hinted out at the five levels of human needs. The need of self actualization is on top of the pyramid. The Maslows Hierarchy Model is as follows: http://dinamehta.com/blog/wp-content/uploads/2007/10/800px-maslows_hierarchy_of_needssvg.png Source:NetMBA.com Empowerment is in fact fulfilling ones need of self actualization. It is difficult to develop an environment that allows team players to find opportunities for self-actualization, and to be respected and feel empowered. But in the hospitality industry it is deemed important to allow employees to take responsibility of their actions. (Barbie et al, 1991) believed that a feeling of personal efficacy and self determination in nurtured among employees. They are supposed to feel that they have power and can make a difference. They have choices and can exercise it. (Johnson, 1993) 4.2.2 Employee empowerment in the hospitality industry: Employee empowerment is particularly relevant in the hospitality industry because employees have the maximum amount of direct customer contact. Levels of customer satisfaction can be improved by empowering employees to handle guest requests or problems immediately, rather than having to report to their managers .Managers fundamental task in a restaurant is to improve performance (Haddadj, 2003). Organizations operating in different industries have different set of management rules. The risk is high where the service act is directed at the minds of the people. Caring attitudes by managers succeed in bringing forth employee dedication and approval. (Black et al, 1996) 4.2.3 TGI Fridays Restaurant: The organization structure at TGI restaurants is somewhat traditional and typical for the hospitality business. At Fridays a standardized layout and decor is balanced by an extensive menu which allows the customer to decide on what they should consume within the range. In many ways the offer is comparable to mass customization in manufactured products. The customer knows what to expect, and can personalize the experience through the extensive menu. 4.2.4 TGI Fridays Operations: The Restaurant Manager is responsible for the handling of affairs of the unit. The Front of house operations is managed by the senior service manager. The quality manager is in charge of the operations in kitchen and stores. People are trained for specific jobs that include jobs at bar, in the restaurant and the kitchen. Some employees play a supervisory role as shift leader. Trained hosts receive guests and the expediter is responsible for ensuring the speedy production of meals from the kitchen. To ensure quality and consistency in the service offering is a lot harder to accomplish than in other sectors. This category of service firms is unique since the organization is not isolated from the customer the latter must physically be present throughout the service act, unlike other sectors such as manufacturing (Fitzsimmons and Fitzsimmons, 2004). These are recognized as the critical success factors. (Boynton et al, 1984) define critical success factors as those things that must go well to ensure success for a manager. They imply that these administrative areas must be given individual attention to bring about higher performance. The thorough interaction between the service organization and the customer in person has profound quality implications for the organization. In the case of TGI Fridays where employees are delivering a mass customized service, they need to exercise consultancy skills in their interpretation of customer service needs. This helps in increased motivation in the workforce. This in turn will able the employee to reach future performance standards (Nemoroff et al, 1979). 4.2.5 Employee Empowerment at TGI Fridays: TGI Fridays foster an environment of employee empowerment. They have created an environment where employees are nurtured to take responsibility for their actions. So, performance at TGI Fridays requires more than merely taking order and delivering to the customer (Ritzer, 1993). This is very important to managerial aspirations for their approach. Employees need to be able to interpret, and then deliver, the customer service required. At Fridays employees are managed through a cluster of approaches to enhance perfection in work. When it comes to special events, it really shows that everyone in the staff is an important player. For instance during the week People arrive for their shift, do their shift, and go home. But at special occasions like Christmas, Dub-Dubs, door hosts, bartenders and managers alike stay behind after working. Everyone make sure that customers when they check in feel comfortable about the place. The slogan is to be trusted and respected. This is the managers duty to be an effective communicator and devote time to everyone equally. The natural skills and talents of employees will be realized and utilized to the organizations effectiveness (Ripley and Ripley, 1993). TGI FRIDAYS support the staff to be hands on with customers, but at the same time assesses the character and mood of the guests in order to achieve appropriate level of interaction. They have designed a book they call as the WOW Book. 4.2.6 The WOW Book: TGI FRIDAYS has a book known as WOW (WALK ON WATER). This book for staff lists the extra stuff the employees can offer to the customer. One such example that comes into our mind is lighting a cigarette for the customer. Before the start of each shift, employees are involved in a board game through roley. This role play is based on service encounters. The is based on the culture and philosophy of the organization. The objective of this is to inculcate each employee with the values of the organization. Unlike bureaucracies, empowering organizational structures are collaborative team based organizations (Beyerlein et al, 2003). 4.2.7 TGI Fridays Passport: The management at TGI Fridays have created a flexible employee rotation program once the training is completed. This program is known as the TGI Passport. This system enables employees to work in other branches, states or countries when there is a vacancy. This is an excellent example of empowering employees through flexibility, thus ensuring loyalty. This scheme not only retains staff but also reduces training costs. 4.2.8 The Five Star Values at TGI Fridays: TGI Fridays has identified five star values to symbolize its philosophy and culture. Each value is presented as a triangle and each side of the triangle must be balanced in order to deliver the service the Fridays way. In addition to these stars values, the three rings of the perceived guests are also taught to the staff. These rings represent the core offerings of the brand along with the consistent standards of service. They also entail an environment in which individual employee is encouraged to work to their maximum potential. An engaged employee has a natural drive for innovation, efficiency and a talent for building encouraging relationships (Ganguly, 2003). The five star values empower employees; they own their job and want to achieve better because they feel rewarding for doing so. 4.2.9 The Service Encounter: TGI Fridays calls its service encounter as an unusual experience. Employees are encouraged to think that TGI Fridays gives its customers a value for their money. For TGI Fridays incorporate elements of standard procedure manuals laid down production and presentation specifications. Test on product knowledge is used to ensure that front line employees had the requisite knowledge to be able to advise customers. Dub-Dubs are allowed to offer advice to customers as to how to structure their meal. Furthermore, they also have to identify the customers service requirements and deliver what is needed. (Lashley, 2000) notes that normative control in TGI Fridays is one of the tools to retain employees and encourage them to take ownership of the service encounter. Service target times at TGI Fridays call for the starters to be served within seven minutes of receipt of the order. Main course items must be served within twelve minutes. A computer programme helps managers to check the timing of these service times. Dub-Dubs are trained to work in routines. They check with the customer regularly after three minutes of delivering the meal. The front-line staff is encouraged to develop a sense of ownership of the service encounter. (Spinalli et al, 2000) establish that empowerment leads to both employee and customer satisfaction. Managers are keen to make sure that the employee is able to meet up customer service requirements, answer queries, offer advice, and present the appropriate performance, and maintain company sales targets. The nature of the work requires a particular type of individual, someone who relates well with customers. 4.2.10 Empowerment and Employees Performance: Employee performance requires, more than the traditional acts of greeting, seating and serving (Hochschild, 1983). Customer satisfaction, attitude towards the customer and meeting the order in a specified time tops the list at Fridays. The bar staff at TGI Fridays provides both the showmanship needed to command a premium price. Work teams and information sharing are the building blocks of employee empowerment. Empowered employees own their jobs; can assess their personal and corporate success. The purpose of empowerment is often to cultivate confidence between employers and employees with the end goal of continuous improvement (Khan, 1997; Lawson, 2000). Workplace know-how is a combination of the foundation skills and the workplace competencies. The competencies cannot be achieved without a strong base; but the two can-and should-be learned simultaneously. Employees are expected to control themselves internally by being nice, cheerful, smiling and courteous to customers even when the customer is rude and offensive (Royle, 2000). The performance of the unit is measured by a system known as a WinCard. 4.2.11 The WIN Card: TGI Fridays used wincard which stands for Whitbread in Numbers scorecard. This is a communication tool that helps in bolster the performance. It uses the scorecard approach. Wincard measures a common set of scores across each unit, brand and at a group level. This enables employees to know better what they are doing and ensure that all employees are working towards the same company goal. It provides a reliable, tangible way of both motivating them individually and as a unit and identifying key areas for improvement. This tracks performance on a monthly basis against the agreed target and an in-store wall chart which display to employees the year- to- date results and monthly results via a color coding system. A traffic light system measures these scores. Green measures a result if the performance is better than the anticipated performance. Amber measures a performance that is better than last year but worse than the anticipated financial plan. Red signifies a performance that is just getting worse. 4.2.12 Guest Feedback: Guest Feedback is an important component of TQM. Hospitality businesses do conduct these surveys to get hands on information about the customers experience. The questions asked are about the customer sense of well-being and the experience as an individual. These questions measure the emotional attachment of the guest with the brand. Companies like TGI Fridays gain the feedback and ideas of their associate through these surveys. They empower their employees and they in turn try to score highly in guest and employee satisfaction surveys. It is a win-win situation. The recognition identifies the optimistic approach of the company. At Fridays, recognition comes in different varieties ranging from the award of eye-catching pin badges to trips abroad for high performing management teams. 4.3 Customer Relation Management: In todays increasingly competitive market, it has become increasingly difficult for businesses to remain competitive. With an increase in competition, organizations are focusing more and more on increasing customer satisfaction, as it is the key to remain competitive in the market. In restaurant operations, such as TGI Fridays, it is projected that new customers cost 11 times more to generate than repeat customers (Sellers, 1990). These economic points of views for empowerment further reinforce claims that employee turnover and bureaucratic control systems will decrease operating costs. Quality is a strategic issue and many aspects of quality management entail strategic thinking within the organization about their customers and their requirements. The value of long term relationships in services marketing has only recently been known. External environments can alter rapidly and companies may not be able to change accordingly (Zacharakis et al, 1999). Employees at TG