Archive for July, 2010

Guest Blog: HR Perfect Storm

Monday, July 26th, 2010

Significant drivers are creating a potential HR Perfect Storm for Private Clubs – The Recession, Rising Unemployment, Growing Regulation, Increasing Litigation and Downsizing.

So how can clubs develop a strategy to streamline payroll and HR processes, protect themselves and avoid costly mistakes.  Clubs generally fall into two basic camps when it comes to their payroll and human resource strategy:  in-house or outsource.  In-house means club staff are generally directly responsible for the process and outsource is defined as contractual service with a 3rdparty to perform all or part of a particular HR process.  As a sub-category of outsource, some clubs utilize a Professional Employer Organization (PEO) but we generally recommend against this strategy.

The vast majority of clubs opt for an “outsourced” strategy to relieve administrative burden, gain expertise and prevent liability.  Given the trend towards Club Controller’s taking on increasing HR related responsibilities, this approach is likely to accelerate.

Develop a Strategy.  Within the category of “outsource payroll”, there are a variety of sub-strategies clubs employ.  The beauty of outsourcing is each club has the flexibility to customize its level of services based on existing resources, expertise, payroll & HR complexity… and budget.   At the heart of any club’s outsourcing strategy, the goal is saving time and reducing expenses.

Key Drivers.  All strategy considerations should be evaluated against the positive or negative effect on these key drivers:

  • Administrative Burden – This really comes down to taking a close look at resources – time, people and money; determining if the club is getting the best return on investment of each.  Additionally, what are the opportunity costs and associated risks?
  • Compliance and Risk Exposure – The question here is:  Do I understand the rules of the game and are there processes in place to make sure I stay up to date and on top of the rules?   Is the club at risk and how much risk is the club willing to tolerate?
  • Employee Relations – How is the morale of the club’s employees and what effect is this having on productivity and profitability?  Are time and attendance policies fair and are they fairly and equitably enforced?  Are they enforced at all?
  • Asset Protection – Related to risk, this is quantifying and documenting the high risk points related to payroll and human resources.  One of the most common types of litigation a club may face is employee related.  Is there a way to protect the assets of the club from frivolous HR related lawsuits?
  • Cost Considerations – Is there pressure on the club to reduce expenses?  Labor is typically the biggest expense making it the most likely candidate for significant savings.  Can you do this without a negative effect on service?

Action Plan.  To get started in developing a high performance plan for your club, schedule a full payroll, HR and compliance audit.  While I recommend hiring a professional HR Consultant to perform an external audit, some clubs may opt to conduct an internal audit for budgetary reasons.  To provide an idea of what is involved, you can download a Sample HR Assessment Form here (courtesy of Crawford Consulting Group).

Once the audit is complete, you can evaluate your clubs strengths, weaknesses, opportunities and threats (SWOT) to determine the best processes to outsource.  Again, the overall goal is to save time, reduce expenses and prevent risk.  Every club is different and there is no perfect combination of outsourced services, but below is a list of the most commonly outsources processes.

outsource-functions1

HR Perfect Storm for Clubs White Paper.  If you would like to dig a little deeper into the current HR environment clubs are facing today, the most important issues and how to develop a winning HR strategy, check back here for our upcoming white paper.  If you would like to receive an advance copy, email us at info@clubpayroll.com with HR White Paper in the subject line.

Tom Howard, President, ClubPay

Tom has worked in the private club industry for over 20 years working in various positions within private country clubs including food and beverage manager, general manager and director of operations. For ten years, Tom has helped over 600 clubs “get the most out of technology” in his role as Vice President of Technology Training Associates (TTA), the largest provider of the Jonas Software in the country.

This weekly blog comments on and discusses the club industry and its challenges. From time to time, we will feature guest bloggers — those managers and industry experts who have something of interest to say to all of us. We also welcome feedback and comment upon the blog, hoping that it will become a useful sounding board for what’s on the minds of hardworking club managers throughout the country and around the world.

Club Resources International – Management Resources for Clubs!

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Eight Steps to Performance Accountability

Monday, July 19th, 2010

The greatest failure in performance management in any enterprise is the failure to hold managers accountable for their performance.  Many clubs do a poor job in the area of accountability.  This failure is crippling to the long term health and viability of the club.  Here are eight steps to help measure performance and hold managers accountable:

  1. Work Plans.  Have each manager prepare an annual work plan spelling out goals, proposed accomplishments, and timelines for completion of each item.  It’s always a good idea to involve managers in preparing their own work plans though these must be based upon broad guidelines from the board and general manager.  While their buy-in is important to their commitment to their individual plans, ultimately plans must meet the needs and desires of the board and general manager.
  2. Budgets.  In order for managers of profit or cost centers to be held accountable for meeting budgets, they must participate in developing their own budgets.  An unrealistic budget will defeat a manager from the get-go, but “softball” budgets cannot be accepted either.  One of the best ways to budget is to use volume and average sale/hourly wage benchmarks to build the revenue and payroll parts of the budget.  Not only do historical metrics make for more accurate budgets, but analyzing these benchmarks on an ongoing basis makes for a better understanding of shortfalls in revenue or overages in payroll costs.
  3. Benchmarks.  Club departments must be benchmarked in detail – at a minimum revenues, cost of goods, payroll, and other operating expenses should be benchmarked monthly.  These and other benchmarks are the most objective measures for holding managers accountable.
  4. Tools to Beat Budget.  Use the Tools to Beat Budget program whereby all managers with bottom line responsibility track their revenues and/or expenses in real time, thereby exercising greater control over their budget and financial performance.  Properly maintaining the Tools to Beat Budget binder provides all the information necessary for in-depth monthly reviews of performance by the General Manager and other interested parties.
  5. Monthly Review Meetings.  Hold monthly meetings with individual department heads to review progress on annual plans, actual to budget performance, benchmarks, and efforts to correct operational and performance deficiencies.  These meetings permit ongoing review and course corrections or added emphasis as necessary.
  6. Routine Departmental Inspections.  Use routine inspections with a standardized checklist to inspect all club operating areas on an ongoing basis.  Such inspections should monitor and note cleanliness, order, maintenance, safety, security, and other signs of organized and efficient operations.  These inspections when standardized, scored, and benchmarked provide an ongoing measure of these basics of an operation.
  7. Interdepartmental Support Evaluations.  Since all departments of a club are interrelated and depend upon one another for peak performance, each department head should fill out standardized evaluations on interdepartmental support and cooperation.  As an example:  the accounting department will have a hard time meeting its requirements if operating departments do not submit coded invoices, payroll data, inventories, benchmarks, and other financial data in a timely fashion.  If department heads know that their performance in these areas is being monitored and rated, they will put greater emphasis in meeting these requirements.
  8. Performance Reviews.  Base periodic performance reviews for each manager on specific accomplishments and meeting well-defined performance measures.  Meaningful reviews are directly dependent upon the effort put into defining expectations, establishing specific work plans, and creating objective measures for accomplishment and performance.  While it takes some effort to set up a system of objective measures, the rewards for doing so are immense and well worth the effort.

Unless a General Manager does everything himself, he must rely on the efforts and performance of his subordinate managers.  But without measurable accountabilities he has no real means to drive his agenda, performance, and other initiatives to improve operations.  When department heads aren’t held accountable, only the General Manager will be.

Thanks and have a great day!

Ed Rehkopf

This weekly blog comments on and discusses the club industry and its challenges. From time to time, we will feature guest bloggers — those managers and industry experts who have something of interest to say to all of us. We also welcome feedback and comment upon the blog, hoping that it will become a useful sounding board for what’s on the minds of hardworking club managers throughout the country and around the world.

Club Resources International – Management Resources for Clubs!

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Super Service Employees

Monday, July 12th, 2010

For those of us who eat out with any regularity, we’ve all had the experience, unfortunately too rarely, of being waited on by what I call a “super server.”  From the moment she approaches the table we know we’re in for a treat.  Sparkling with personality, she overflows with knowledge about the food, beverages, and accompaniments.  She immediately sizes up our interest in engagement and calibrates her contacts accordingly.  She speaks with confidence and authority, questioning us regarding our preferences and without hesitation recommending what she thinks we’ll enjoy.  The best of the best can unerringly take and serve orders without benefit of pen and dup pad – an ability that never ceases to amaze me.

Such extraordinary individuals are worth their weight in gold.  Not only do they serve with flair and expertise, but they sell, thereby increasing the average check, while making a distinctly favorable impression of competence and professionalism that brings diners back again and again.  This is true in restaurants and just as true in private clubs where members appreciate the recognition and special touches that a super server adds to the dining experience.

Far more frequently, we’ve experienced the norm of service – undertrained, inexperienced employees who may understand the basics of service, but little more.  Often lacking in knowledge, personality, and attitude, their service may meet minimum expectations but seldom inspire the diner to sample the extras – appetizers, desserts, wines, and specialty drinks – that the kitchen works so hard to create and which enhance the overall dining experience.  If truth be told, these employees are doing no service to their employers and in many cases are doing outright harm by driving customers away.

The often repeated maxim for employers “to hire for personality and train for technique” encompasses a basic truth.  Attitude, personality, and engagement seem to be inborn skills and are difficult to teach.  While training can provide service skills and knowledge, thereby increasing a server’s confidence and maybe even engagement skills, the best service employees posses an indefinable quality that is difficult, if not impossible, to replicate.

Given the dearth of these extraordinary service employees, they should be recognized and compensated for the rare skills they possess.  Too often though, their presence on an employer’s staff is viewed as simple good fortune with little or no effort made to differentiate them from the common herd.  The result is that in short order they move on to greener pastures where their talents are more fully appreciated.  When this happens the loss to the establishment is often more than can be appreciated at the moment.  Not only has the employer lost a super server, but a money-maker, an ambassador, and an example for less accomplished co-workers.

And everything said about food servers applies as much to super service employees in retail, activities, golf, tennis, administration, and other areas of the club.

What can clubs do to attract and retain Super Service Employees?  By analyzing and considering the wants and needs of super service employees, it is possible to set up programs to attract and retain them.  In simplest terms it boils down to respect, status, meaningful work, and enhanced compensation.  In particular I would focus on the following:

  • Establishing consistent Service-Based Leadership at your club.  The underlying premise of Service-Based Leadership is leaders at all levels who recognize the essential task of serving all constituents, including employees.  Weak or self-serving managers will drive them away.
  • Implementing employee empowerment which is a natural extension of Service-Based Leadership.  Empowered employees are enlisted as partners in the club’s effort to improve the operation and provide high levels of service.  Super service employees want and need this enhanced participation and contribution.
  • Improving communications with employees.  All employees, but especially the super service ones, want to know what is going on and how the operation and direction of the club affects them.
  • Mentoring employees.  Curious and intelligent, super service employees appreciate the time and effort made in giving them the big picture and a deeper understanding of the workings of the club.
  • Creating “master” service positions that recognize higher skill levels and greater knowledge.  The job descriptions for these positions must clearly lay out those distinguishing skills, characteristics, and duties that warrant more responsibility and higher compensation.  Such master positions can then become the aspiration of new or less accomplished employees.
  • Creating a clear career path of knowledge, skill development, and certification which allows other employees to set their sights on the more highly regarded and compensated master level.
  • Assigning master level employees the task of teaching and training those who aspire to the higher level.  Such tasking serves the super service employees’ need for participation and contribution while improving the overall skill level of other employees.
  • Challenging super service employees to engage in creative project work such as taking a larger role in training, creating more effective training programs, formulating and executing member relationship management strategies, and establishing a “wow” factor program for members.
  • Recognizing and rewarding super service employees.  Ensuring they know they are appreciated.  This not only serves their needs, but demonstrates to other employees their value, thereby motivating others to follow their example.  Rewards should also be tangible, such as:  higher pay based on their higher levels of performance, incentive opportunities, preference in scheduling, and educational opportunities.
  • Providing benefits to all employees based on well-defined employment statuses, i.e., full time, part time, and seasonal or temporary.  At a minimum benefits should include holiday pay for designated holidays, vacation time, personal/sick time, health benefits, and retirement benefits.

As an industry we can no longer view employees as a disposable asset, which is what we do when we view ongoing turnover as a cost control measure.  Operating small, stand-alone hospitality organizations with multiple businesses, high levels of service, and lean management staffs covering long hours and weeks is too difficult a task to do without a stable, competent workforce.  When we view labor as a disposable, easily-replaceable commodity, we condemn ourselves to high levels of turnover with its attendant training costs, turmoil, and loss of organizational continuity.  High levels of turnover must be viewed as a critical organizational and leadership failure that is damaging in all ways to the club’s mission and operation.

None of these solutions is easy to implement and will certainly add costs to the club, but I believe the current employment paradigm is far more damaging to a club’s success and remains a significant “hidden” cost of operations.

Thanks and have a great day!

Ed Rehkopf

This weekly blog comments on and discusses the club industry and its challenges. From time to time, we will feature guest bloggers — those managers and industry experts who have something of interest to say to all of us. We also welcome feedback and comment upon the blog, hoping that it will become a useful sounding board for what’s on the minds of hardworking club managers throughout the country and around the world.

Club Resources International – Management Resources for Clubs!

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Mastering the ABCs

Monday, July 5th, 2010

As children we all mastered our ABCs, the basic building blocks of language and learning.  The term “ABCs” has long since come to signify the basics of any endeavor.

All of us who work in our industry recognize that the profession is made up of mastering the many basics of hospitality and service.  Even in an enterprise as seemingly complex as food service, it is the execution of the basics that underpin all our efforts and ultimately leads to success.

Of all the things I’ve learned in my hospitality career spanning over 35 years, the ultimate discipline of success is the necessity of executing the basics well.  Jim Collins’ research for his groundbreaking book, Good to Great, Why Some Companies Make the Leap . . . and Others Don’t, pointed undeniably to “disciplined people taking disciplined action” as one of the prerequisites to any successful enterprise.

While there are many innovative, cutting-edge ideas to improve the products, service, and performance of your operation, you must build these enhancements onto a foundation of the basics.

With these thoughts in mind, I’d like to commend to you the most basic, yet ultimate tip for operating your club – that as you contemplate the many ways to add service and value, you must always focus your attention and that of your entire staff on the ABCs, that is . . . Accomplish the Basics Consistently

Excerpted from 101 Tips to Improve Your Club Operations.

Thanks and have a great day!

Ed Rehkopf

This weekly blog comments on and discusses the club industry and its challenges. From time to time, we will feature guest bloggers — those managers and industry experts who have something of interest to say to all of us. We also welcome feedback and comment upon the blog, hoping that it will become a useful sounding board for what’s on the minds of hardworking club managers throughout the country and around the world.

Club Resources International – Management Resources for Clubs!

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