How to Develop A Restaurant Management Bonus Program and Keep Your Great Managers

As you well know, restaurants and the entire food service industry have been facing an onslaught of challenges the past couple years. A huge one is the ongoing labor crisis. Restaurant owners and managers have been struggling to find employees to fill their staff. If that weren’t hard enough, restaurant managers themselves have become scarce as many have left the restaurant industry entirely. So, how do restaurant owners deal with this management crisis? Management bonus plans.

Motivating and rewarding great restaurant management is a crucial component to successful business operations. Incentives and bonuses can be given to managers to consistently improve productivity, innovation, morale, sales, goal achievement and loyalty.  Oftentimes, however, are left wondering: what exactly is the best method to deliver a bonus. How much should you offer? What are the industry standards? What types of incentives should I offer? How often should I grant bonuses?

To answer these questions, let’s take a look at different elements of bonus and incentive plans that work – where hopefully you’ll find inspiration for the design of your management bonus plan at your restaurant.

Effective Bonus Plan Elements

To develop a successful incentive bonus plan for your management team, you will first need to make a detailed manager job description for your restaurant. Without this manager job description, the managers you end up hiring in your restaurant won’t know what bar they or their staff will be judged by, which will make your business suffer. A major benefit of this is that your hyper-specific restaurant manager job description can serve as an outline for creating your management bonus program.

Next, cost accounting has to inform your restaurant manager bonus plan. Budgets have to factor into bonuses. They make an owner’s life easier by providing the ability to establish targets, evaluate financial performance, and operate a profitable business. There are many cost targets you can track in the management your restaurant, but some of the most impactful deal with the percentage of food cost, labor cost, pour, and prime cost cost. Prime cost refers to cost of goods sold and labor targets. In addition to setting budget goals, you must provide your managers with a detailed plan for exactly how they will make their targets. Otherwise, they’ll be going upstream without a paddle or map – not a good strategy for your managers, staff, or your restaurant.

Other useful elements in a management incentive plan are scoring systems. While you shouldn’t make scoring systems your sole judge, they should contribute to your evaluation of how the managers are performing in your restaurant. Manager Scoring systems can incorporate health department inspection score, customer complaints, and customer comment cards. Aside from low sales, low scores on these scales can really hurt a restaurant and negatively impact the moral of your employees.

Another crucial element in an effective bonus plan for managers in your restaurant is regular executive evaluation and feedback. You should make a plan to review the performance of your managers with them. View it as a collaborative process with the managers in your restaurant. Quarterly goals tend to work better than monthly ones in evaluating bonus plans for managers. This will keep the management team on track and make your business goals more attainable since managers in your restaurant will be more likely to buy in to a plan based on their input. Downstream from that, your managers will model this to your hourly restaurant employees, which will make your restaurant a well-oiled, revenue-generating machine – icing on the cake.

If you are looking for even more specifics on what an effective bonus strategy for a restaurant manager looks like, Restaurant Business offers some great examples:

• “Bonuses based on a percentage of sales over a budgeted or historic target.
• Bonuses based on specific metrics such as raising revenue while lowering food cost, labor cost or prime cost.
• Bonuses as a percentage (commission) on catering/private dining sales.
• Bonuses based on strategic sales or control initiatives such as increasing the percentage of bar sales, reducing voids or raising check averages.”

Remember, not one size fits all – that’s especially true when it comes to restaurants. The food, chef, staff, sales, inventory, and bar are different from restaurant to restaurant . So, why would a bonus for managers be any different? Pick and choose the bonus elements that will work for your restaurant’s plan.

While incentive bonus structures will vary from business to business, here are a few great resources to help you gain a better understanding on what other restaurants are doing.

Other Resources for Developing Restaurant Management Incentive Programs:

• Nation’s Restaurant News: 5 takeaways from Chipotle’s game-changing employee
• QSR Web: Taco Bell offering paid sick days, $100,000 GM salaries
• RestaurantReport.com: What Should You Pay a Restaurant Manager?
• Forbes: A Well-Rounded Restaurant Staffing Strategy Includes New Technology

Do you need assistance in developing a cost-effective incentive-based bonus plan for your employees to help meet your business’s goals? Contact Synergy Restaurant Consultants to see how we can help improve your bottom line through a successful employee incentive program. Better yet, we developed a top of the line  training course – Synergy U – that covers every conceivable management topic in detail with all the tools you need to make your restaurant operate at peak efficiency. If you’re a restaurant owner, you can develop a top-notch bonus program using the course content as an indispensable resource. If you’re a manager, you can really take your game to the next level with Synergy U.