Your Most Important Stakeholders: How to Treat Your Restaurant Employees as Investors and Not Merely Assets

In “Strategic Staffing,” Jean M. Phillips, professor of human resources management at Penn State University for more than 25 years, writes organizations view their employees as either “assets” or “investors.” Phillips explains that assets are, “human capital to be impersonally managed like other organizational assets, including cash, machinery, or buildings. Investors choose to work for an employer and have discretion over the amount of effort they put into their work. If employees are thought of as assets, the staffing focus is on managing the cost of employees and tightly controlling them.”

By contrast, she adds, “If applicants and employees are thought of as investors, the focus is on establishing a mutually beneficial relationship in which employees are recognized as choosing to invest their resources in exchange for a return – a supportive culture, good pay, and benefits.”

In this labor environment, where finding and keeping good restaurant employees is challenging and in which you need to maximize the effectiveness of every staff member, you cannot afford to purchase labor like interchangeable widgets. This can lead to a death spiral of turnover and constant staffing shortages.

When people are financially invested, they want a return. When people are emotionally invested, they want to contribute.
– Simon Sinek

Here are some practical ways to transform the way you view your restaurant team members – seeing and treating them more as investors, not as assets.

Get to know your people.Top management of national chains visit their restaurants and talk to their employees on the front line. If you own and operate a single- or small multi-location concept, there is no reason you cannot take time, perhaps once a quarter, to meet with your staff one-on-one to connect with them on both a personal and professional level.

Some of your restaurant employees are looking for careers in hospitality and may value your advice on the best path, whether in your concept or the industry. Some of them may be trying to make ends meet and raise a family or finish school. Some of them want additional hours. Some require more flexibility. When you can align your jobs with their interests and needs, you can foster their loyalty to the restaurant and give them a reason to invest, not simply sell, their resources in your business.

Invite your restaurant employees’ ideas and suggestions. The folks who run your kitchens and service your guests are experts on what works and does not work in your restaurant. The process can also personalize the relationship between the company and the people who serve its customers and guests.

Consider this story: A young man worked as a food runner for an independent full-service upscale concept. He enjoyed his fellow workers and was satisfied with the pay at that stage of his early restaurant career. He noted that guests were consistently asking for a particular substitution on a menu item. He shared that information with the general manager who told him, “We pay you to be a food runner, not for your menu advice.” The young man quit the job shortly thereafter and is now at another restaurant where owners and managers appear to value his ideas.

Most employees want to feel like their contributions are meaningful beyond just carrying out their daily tasks. When the restaurant owners and managers value their opinions, it sends a message that they are investors in the business.

Find ways to reward outstanding service.Even a modest gift card tells a staff member who goes above and beyond that you notice and appreciate their efforts. Perhaps one employee solved a guest’s problem in a creative and meaningful way. Perhaps an entire crew provided an excellent experience when the restaurant was slammed. Sometimes recognition is as simple as a thank you note.

Take-home Point.In more than 70 episodes of the RestaurantOwner.com podcast The Corner Booth, the most successful independent operators expressed the importance of treating their employees as investors. Hospitality requires human interaction. Food service can be performed by a vending machine stocked with pre-made items.

For insights on how to prioritize your employees and foster a positive culture, check out our course Building a Culture of Accountability. And for more restaurant operations best practices, watch our webinar How to Be a Better Boss: Key Leadership Skills for Restaurant Owners & Managers.

Have a profitable week!

The RestaurantOwner.com Team