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:
CHARLEYS FAMILY STEAK HOUSE
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
Class Objectives 1. Considering the components of performance measurement 2. Understanding performance measurement effectiveness 3. Linking performance measurement to compensation
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
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
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
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
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
Charleys Family Steak House
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).
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.
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
Class Objectives - Revisited 1. Considering the components of performance measurement 2. Understanding performance measurement effectiveness 3. Linking performance measurement to compensation