Archive for September, 2012

Potential Internal Control Problem Areas

Monday, September 24th, 2012

There are a number of areas of club operations that present special internal control problems.  Managers at all levels should pay particular attention to these areas to prevent loss.

Snack Bars

Snack bars are operations with many small, easily pilfered items and relatively low paid employees who operate with a minimum of supervision.  Without proper controls and oversight, a great deal of loss can occur in these operations.

The most effective way to curtail loss is to conduct frequent inventories of food and beverage stocks and to compare product consumed (per inventory) with sales for the same period.  If this is done on a regular basis, any pattern of ongoing loss will be quickly spotted.  In most cases, the mere fact of frequent inventories and questioning staff about shortages will have a diminishing effect on such loss.

This coupled with a policy of termination for theft and following through on this policy when theft occurs will send a clear message to staff that pilferage will not be tolerated.

Beverage Cart

The beverage cart has the same potential for loss as snack bar operations.

It is essential that all beverage cart sales be recorded on member charge slip signed by the member.  These charge slips must then be rung into a point-of-sale terminal at the end of each shift.  The original member-signed charge slips must be attached to the printed POS charge slip.  All charge slips must then be turned in to the Accounting Office with the departmental daily report.

One way to control stock on the beverage cart is to require all items carried on the cart to be requisitioned from the Turn House attendant.  The cart attendant is required to track all sales on a  pre-printed form with all product normally carried.  At the end of the shift/day the extended sales form is compared to the extended product consumed form (issues less returns).  If signatures from both cart attendant and Turn House attendant are required on inventory forms, a measure of accountability is assured.

Finally, a manager must compare sales to the inventory consumed on a regular basis and question all shortages.

Bar Operations

Beverage operations are notorious for loss potential.

The three major problems are routine over-pouring, pilferage by employees, and pouring excessive amounts of alcohol in anticipation of a cash tip (despite the policy against tipping in most clubs).

The only real defense against both of these potential problems is frequent inventories.  The club requires daily inventories by bar staff.  These inventories must be checked closely by management.  Periodic inventories by management must verify the accuracy of these daily inventories.  All discrepancies must be investigated.

In most cases, a vigilant management that questions all discrepancies will go a long way toward reducing loss from bar operations.

Golf Course Maintenance Purchasing & Receiving

In most clubs, golf course maintenance is far removed from the clubhouse and normal receiving areas.  The lack of senior management oversight that this distance creates makes the purchasing and receiving of large and expensive stocks of fertilizers, chemicals, and other supplies problematic in that the same person who does the purchasing is also doing the receiving.

The best course to encourage sound internal controls is to require the use of purchase orders or annual purchasing contracts for the great majority of golf course maintenance supplies and materials.  In this way, the General Manager will review and sign all POs and Purchasing Contracts.  Management periodically checking prices, as with food purchases, is an appropriate internal control best practice.

Golf Course Maintenance Payroll

The same problem with distance can also cause problems in payroll, especially if timekeeping is performed manually.  It is a good idea to use the same electronic timekeeping system in golf course maintenance that is used in the rest of the club.

Again, because of the remote location, it is essential to ensure that all employees who are being paid actually exist.  This can be done by requiring golf course maintenance personnel to come to the club’s administrative offices to pick up and sign for their paychecks.

Benchmarking

While benchmarking is not an internal control, per se, it can be used to establish the norm of operations and allow management to quickly spot out-of-line numbers which may be indicative of fraud or abuse.

Management can do itself a big favor by ensuring that areas of the operation which present potential internal control problems are thoroughly benchmarked.  In many cases, the only indication that something may be wrong in an operation will come from volatile or extraordinary benchmarks.

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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Departmental Staffing Guides

Monday, September 17th, 2012

Clubs will typically create well-defined employment categories for employees to make benefit determinations based on the number of hours worked.  As an example one club created the following definitions:

  • Full time – employees who work not less than 35 hours per week on a continuous basis and employment is anticipated to last 11 months or more.
  • Part time – employees who work less than 35 hours per week on a continuous basis and employment is anticipated to last 11 months or more.
  • Seasonal – employees whose employment is expected to last less than 11 months regardless of the number of hours worked per week.

In this instance, full time positions were eligible for full benefits, the part time staff received more limited benefits, and the seasonal positions received no benefits.

Given the seasonality of most club operations, clubs have a need to expand and shrink their labor force to meet the needs of each seasonal business levels.  The ability to do this in a timely manner will save the club significant amounts of unnecessary cost.  Further, most club managers recognize the benefits to member service and organizational continuity of having a stable work force.  Lastly, clubs should avoid full time staff layoffs as much as possible for both the cost and morale impact they create.  The challenge then is to balance the need for a stable staff with the cost-saving ability to shed excess positions when business levels warrant.

The solution to these competing needs is to establish staffing guides for each department made up “core” and seasonal positions.  The core positions represent those staffing needs for year-round minimum function and service needs and can be either full or part time depending upon the needs of both the club and employees.  Seasonal positions are just that – those that are added and reduced as business demand warrants.

Each department head, by creating a staffing guide of core and seasonal positions, determines optimal year-round staffing.  These core positions, then, are “protected” from seasonal adjustments in all but extreme situations.  Once the staffing guides are determined for each department, no new hires should be made for core positions without an existing vacancy or the express approval of the general manager.

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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Organizational Leadership

Monday, September 10th, 2012

What does it mean to be an “organizational” leader?  Much has been written to define what constitutes leadership, the role of the leader, and the habits of successful leaders.  Though the exercise of all leadership is situational, the following traits can invariably be found in those who lead successful organizations.

Leading with a Vision. Moving large and complex organizations in a particular direction requires the ability to formulate and articulate a vision of what the organization should be.  “Selling” the vision requires constant hammering home of easy-to-grasp themes.  Without the “big picture” sense of direction, employees become lost in the day-to-day detail and monotony of their jobs.  Leaders must engage with employees on all levels and view such interaction as an opportunity to “spread the gospel.”

Transforming Vision into Day-to-day Action. Long range vision must be broken down into a concrete plan of action for managers and supervisors at all levels.  Annual plans, performance reviews, and goal setting sessions play an important part in establishing and communicating near and long term objectives.  Many organizational failures result from faulty or inadequate communication of the vision.  Informed employees are better employees.  Leaders should strive to create an environment that facilitates communication flow where superiors and subordinates keep each other informed, quality and    performance standards are communicated, feedback is constantly given, and every employee knows where the organization is going and how it will get there.

Having a Bias toward Action. Leaders accomplish something every day.  There is an insistent time factor in management.  New problems crop up continuously.  When problems are not solved, the sheer volume of their accumulation can paralyze an organization.  A leader’s ideas, words, actions, and examples are major determinants in the success of any operation.  No one should need to tell a leader what has to be improved in his organization.  He should recognize what needs to be done, formulate a vision, and prepare an action plan to accomplish it.

Being Proactive in Finding Problems. Leaders do not have a negative attitude toward problems because they clearly signal where you should devote your time and energies.  A famous inventor once said that he carried a notebook with him and noted each and every one of his daily irritations with the world around him.  He understood if something irritated him, it most likely irritated everyone else.  Finding a solution to the irritation often presented him with an idea for an invention or a business opportunity.  The same principle applies to a leader who is on the lookout for problems.  Invariably they point the way to some improvement in the operation.  Further, when employees work for a leader who solves problems, they feel energized and empowered to do the same.

Knowing that Every Problem has a Solution. Every problem can be solved.  It’s merely a matter of priorities.  Even the most complex problem can be broken down into its smaller solvable components.  Sometimes a solution is the result of compromise or many little steps that contribute to an improvement in the overall situation.  As much as possible, one should look for system solutions to problems, making their elimination part of the routine.

Paying Attention to Details. A good leader must have an eye for details.  Much can be learned by observing an operation and a leader must spend a good deal of his time “out and about” to know what is going on in the organization.

Possessing High Standards of Quality. Leaders must establish and communicate their standards of quality.  When employees are left to decide quality standards for themselves, the best that can be expected is inconsistent, and at worst, a complete absence, of quality and service.

Being a Strong Team Builder. Motivation and morale is built on making every employee part of the team.  Organizational loyalty seemed to be the strong suit of Japanese corporations, but it is little more than a business version of the military’s esprit de corps.  Much of it goes back to pride and recognition, but it also depends upon building a strong organizational identity and constant communication.  At the end of the day, without the willing and committed involvement of employees, the organization will never achieve its standards of excellence or high levels of success.

Having a Positive Attitude. Attitude is all-important in any endeavor.  Employees look to leaders for guidance, reassurance, and example.  A leader must learn to roll with the small ups and downs while keeping an eye on the larger vision.  The proper attitude should also be mixed with an upbeat good cheer that is invariably infectious.

Instilling Dedication to Needs and Desires of Customers. The bottom line for any business is customer satisfaction.  Shortsighted policies that have a negative impact on this satisfaction will eventually show up on the bottom line.  The surest way to keep customers satisfied is to know what they want.  Employees at all levels should be required to constantly seek the feedback and input of their patrons.  Further, they should be instilled with a complete dedication to customer satisfaction.

Recognizing the Importance of Personal Selling. Perhaps the greatest marketing tool available is the committed involvement of leadership in selling.  By becoming actively involved with customers and selling his product at every opportunity, the leader promotes not only the operation, but himself.  Since many decisions are influenced by personal loyalties and first-hand recognition of competency, this type of salesmanship is often the most far-reaching and effective.

Summary.  Effective and efficient operations in all areas of an organization are the direct result of good leadership.  While sound management and technical skills are also important, without leadership the organization will never achieve its full potential.

Excerpted from Leadership on the Line:  A Guide for Front Line Supervisors, Business Owners and Emerging Leaders, Ed Rehkopf, Clarity Publications, 2006

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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Your Constituencies

Monday, September 3rd, 2012

Before you can effectively exercise your leadership skills, you must clearly recognize your various constituencies – those groups who depend on you and for whom you must provide leadership and service.  For many positions this is fairly clear cut; there are members, employees, and a boss.  However, for some positions there may be other groups who rely upon your exercise of leadership.

So for every leadership position, one must identify the constituencies served.  Once you have identified these, make a list of each constituency’s needs and how you and/or your team can best serve them.  In most cases you need to visit with constituents to hear directly from them what they need or expect from you.

With a clear understanding of their needs, you are in a far better position to determine priorities and execute your responsibilities.

The key to serving the needs of those you serve lies in ensuring that you build strong relationships with individuals.  How do you do this?  Begin by:

  • Treating everyone you meet with courtesy, respect, and good cheer.
  • Focusing on each person you deal with as if he or she were the most important person in the world.
  • Taking the time to get to know people; sharing your time and attention with them.
  • Learning about other people’s jobs and the challenges and the difficulties they face.
  • Keeping promises and following through on commitments.
  • Being principled, showing fairness, and demonstrating integrity.
  • Recognizing the ultimate value of people in all you do.

Relationships depend upon how you view yourself in relation to others.  If you see yourself as separate and apart from your constituencies, if you view others as the means to your ends, if your vision and goals lack a broader purpose than your own needs and ambitions, establishing meaningful relationships will be impossible.  On the other hand, when you see yourself as part of a team with a shared mission, then a sense of service will be an intrinsic part of your service team relationships.

Excerpted from Leadership on the Line: A Guide for Front Line Supervisors, Business Owners, and Emerging Leaders

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!

Add                to Technorati Favorites