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CHARLEYS FAMILY STEAK HOUSE. Class Announcements Service Learning Assignment: Progress Report should be completed one week after initial meeting with.

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Presentation on theme: "CHARLEYS FAMILY STEAK HOUSE. Class Announcements Service Learning Assignment: Progress Report should be completed one week after initial meeting with."— Presentation transcript:

1 CHARLEYS FAMILY STEAK HOUSE

2 Class Announcements Service Learning Assignment: Progress Report should be completed one week after initial meeting with the client – those submitted will be returned next class Final presentations should include Danika LeBlanc or I Service Learning Final Report (group) due March 31 st (flexible) Final Exam 7:00pm April 11, 2014 in SCHW Assignment #5 due April 3 rd ; available on-line

3 Class Objectives 1. Considering the components of performance measurement 2. Understanding performance measurement effectiveness 3. Linking performance measurement to compensation

4 Charleys Family Steak House Company Context: Charley Turners four steak restaurants Located in a rapidly growing mid-size city in Texas Restaurant goal – best steak house in the city Characterized by: Pleasant atmosphere Fast and courteous service High quality food Freshly prepared good Reasonable prices Innovative express lunch option

5 Charleys Family Steak House Company Context: Unit 2 Alex Pearson is the manager of Charleys Steakhouse Unit 2 (since one year) Seating for 150 customers Employs people Menu featured 4-6 items in each of four categories ranging in price from $1.99 (Small salad) to $16.99 (Lobster dinner) Feature an express service for frequent lunch time customers

6 Charleys Family Steak House Company Context: Customer Segments Community Located next to a shopping mall Business community Offices are nearby No eating establishment within one mile radius Hotel 100 room budget motel with no restaurant within walking distance

7 Charleys Family Steak House Company Context: Evaluation Plans to implement a new bonus plan 25% of salary in bonuses Specific performance measures not yet determined Suggestions from managers not solicited Comparison between budget and actual Original budget prepared was aggressive and optimistic Profit is $46,490 less than planned Severity of the recent recession

8 Charleys Family Steak House Issues: How did actual sales compare with planned sales? Profit is $46,490 less than planned Actual sales vs planned sales – variance analysis Sales mix analysis Customer use of coupons How well were costs and expenses controlled? Actual expenses vs planned expenses – variance analysis Performance Evaluation Comparison of planned vs actual New bonus plan

9 Charleys Family Steak House

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19 Conclusions: Budget vs Actual Actual operating profit for Unit 2 is $47,490 less than anticipated Actual profit for Unit 2 is $62,180 less than the flexible budget Customer mix change from 40/60 to 50/50 which changed weighted contribution margin from $1.84 to $1.63 per customer Customers made use of coupons in greater number than anticipated perhaps because of the recession ($105,213 more than anticipated).

20 Charleys Family Steak House Conclusions: Evaluation System Participatory – no consultation Inventive and risk – none communicated Goal congruence – not linked to overall except generally (e.g. best steak house in town) Fair and objective – unknown measures Attainable – Optimistic and aggressive, high expectations.

21 Charleys Family Steak House Conclusions: Evaluation System - Controllability Prices - are set (over 10%) by Charley Ordering - of food done centrally Coupons (discount) - good at all four locations Recent economic recession -was not forcastable Advertising - is managed by Charley Management charge - is assessed by Charley

22 Class Objectives - Revisited 1. Considering the components of performance measurement 2. Understanding performance measurement effectiveness 3. Linking performance measurement to compensation


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