Chapter 5
Managing Productivity and
Controlling Labor Costs
Supervision in the Hospitality Industry
Fourth Edition
(250T or 250)
© 2007, Educational Institute
Competencies for
Managing Productivity and
Controlling Labor Costs
1. Explain how supervisors determine
productivity standards.
2. Explain how supervisors plan their staffing
needs and develop a staffing guide.
3. Forecast business volume using the base
adjustment forecasting method and the
moving average forecasting method.
© 2007, Educational Institute
(continued)
1
Competencies for
Managing Productivity and
Controlling Labor Costs
(continued)
4. Explain how supervisors use staffing guides
as labor scheduling and control tools.
5. Describe the features and functions of
software applications in relation to
scheduling and labor control.
6. Identify procedures supervisors can follow
to increase productivity.
© 2007, Educational Institute
2
Standards
• Productivity Standard—Quantity of
Work by Trained Employees
• Performance Standard—Quality of Work
© 2007, Educational Institute
3
Productivity Measurements
Restaurant: servers, bartenders, buspersons
• Number of covers
• Number of tables turned
• Average check
Front Desk: guest services, bell staff
• Number of check-ins
• Number of check-outs
Housekeeping: room attendants, housepersons
• Number of rooms cleaned
• Quality scores
© 2007, Educational Institute
4
Fixed Labor
Minimum labor to operate facility, regardless
of business volume:
• Department managers
• Assistant managers
• Some supervisors
• Limited hourly positions
© 2007, Educational Institute
5
Variable Labor
Positions filled in relation to changes in
business volume:
•
•
•
•
•
© 2007, Educational Institute
Servers
Buspersons
Kitchen staff
Front desk staff
Room attendants
6
Developing a Staffing Guide
• Determine total labor hours
(from previously established productivity standards)
• Determine required number of employees
(full-time and part-time)
• Estimate labor expenses
(multiply labor hours by average hourly rate)
© 2007, Educational Institute
7
Nature of Forecasting
• Deals with the future
• Involves uncertainty
• Relies on historical data
• Always a variance with actual results
© 2007, Educational Institute
8
Base Adjustment Forecasting
In April, the Fun Family Restaurant had 7,000
covers. The unit manager expects business in
May to decrease by 5% due to cutbacks in
marketing and promotional efforts. What is the
manager’s forecast of covers for May?
Base (1 – 5%) = Forecast for May
7000 x .95
© 2007, Educational Institute
= 6,650 covers
9
Moving Average Forecasting
The Dinner Deli uses a moving average time series
approach to forecast dinner sales. If sales for the past
four weeks were $4,000, $6,000, $5,500, and $5,000
what would the sales forecast be for the upcoming
week?
Moving Average = Activity in Previous 4 Periods
4 Periods
Moving Average = $4,000 + $6,000 + $5,500 + $5,000
4
Moving Average = $5,125
© 2007, Educational Institute
10
Alternative Scheduling Techniques
Stagger regular work shifts
• Greatest number of employees during peak times
• Fewest number of employees during slow times
Compress work week
• Four 10-hour days may better meet demands
during peak season/times
© 2007, Educational Institute
(continued)
11
Alternative Scheduling Techniques
(continued)
Implement split shifts
• Two separate shifts on the same day
Increase part-time staff
• Greater scheduling flexibility
© 2007, Educational Institute
12
Increasing Productivity
• Collect/analyze performance standards
• Generate ideas for new ways to get the job done
• Evaluate each idea and select the best approach
• Test revised performance standard
• Implement the revised performance standard
© 2007, Educational Institute
13