Building employee capacity to improve service quality and performance in chateau restaurant

MBQPM 6 TRAN ANH THANG BUILDING EMPLOYEE CAPACITY TO IMPROVE SERVICE QUALITY AND PERFORMANCE... MBQPM 6 TRAN ANH THANG BUILDING EMPLOYEE CAPACITY TO IMPROVE SERVICE QUALITY AND PERFO

MBQPM 6

TRAN ANH THANG

BUILDING EMPLOYEE CAPACITY TO IMPROVE

SERVICE QUALITY AND PERFORMANCE

MBQPM 6

TRAN ANH THANG

BUILDING EMPLOYEE CAPACITY TO IMPROVE

SERVICE QUALITY AND PERFORMANCE

IN CHATEAU RESTAURANT

MASTER FINAL PROJECT MASTER IN BUSINESS QUALITY AND PERFORMANCE MANAGEMENT

Tutor: Jacques Martin

Ho Chi Minh City

(2018)

DECLARATION OF AUTHENTICITY

I, the undersigned, _, declare that

this final project is my original work, gathered and utilized especially to fulfil the

purposes and objectives of this study, and has not been previously submitted to any

other university for a higher degree and that all the assistance received in preparing

this thesis and sources have been acknowledged

ACKNOWLEDGEMENTS

This work would not have been possible without education and knowledge that have been transferred by Solvay Brussels School of Economics and Management professors who have spent their time and effort coming to Vietnam to teach Especially, I would like to take this opportunity to express special gratitude to Professor Jacques Martin, who is the professor, mentor and tutor guiding and helping this work done

I am grateful to all of my classmates with whom I have had the pleasure to spend time with them in the past 15 months I have learned so much from their skills, knowledge and professional experience

Lastly, I also would like to show my appreciation to my colleagues, friends and family members who gave me much support during my study and this final project

Table of Contents

INTRODUCTION 6

Corporate background and management structure 6

History 6

Products, service and market 6

Current management context and competitive position 7

Organization chart 10

Management style 11

PART 1: Analysis of employee capacity at Chateau restaurant 12

Chapter 1 - Instability of products & service provided 12

Consequences 13

Chapter 2 - The causes 14

Management 14

Methods 16

Man Power 17

PART 2: Building employee capacity’s role in performance and quality improvement 20

Chapter 1: Suggested solutions 20

1.1 Job analysis 21

1.2 Recruitment and onboarding 22

1.3 Rewarding and Recognition 27

1.4 Performance appraisal 28

1.5 Disciplinary processes 29

1.6 Learning and development 30

1.7 Succession planning 36

Feasibility matrix 37

Conduct change 39

Chapter 2: Expected performance improvement 41

Conclusion 42

Reference 43

Appendix A – Job analysis template 44

List of Table

Table 1 - SWOT Analysis 9

Table 2 - Job Analysis Measurement and target 22

Table 3 - Job Analysis Measurement and target 23

Table 4 - Accessing Candidate pool Measurement 24

Table 5 - Screening Measurement 24

Table 6 - Interviewing Measurement 25

Table 7 - Onboarding Measurement 26

Table 8 - Rewarding & Recognition Measurement 27

Table 9 - Performance Appraisal Measurement 28

Table 10 - Disciplinary Measurement 29

Table 11 - Training programs 34

Table 12 - Learning and Developing Measurement 34

Table 13 - Succession Planning measurement 36

Table 14 - Feasibility Matrix 38

is more open to global market and the tourist market became more competitive with many new restaurants entering to the market, the restaurant expanded their clientele to local segment and started to open in few other locations for a number of years After that, in 2013, they decided to centralize the business, thus, focus on one location in district 10 with the capacity of more than 2,000 guests They operated with 170 employees At that time, they started to focus their strategy more on local market by offering weekend deals, buffets and especially functions such as meetings, business conferences, birthday party, year-end party and garden wedding party Because of the location and the food, they were able to reach the annual revenue of 35 billion Vietnam dong during that time However, in beginning of 2016, the rent was not available for them anymore They had to relocate and have been operating

in 2 different locations with capacity of approximately 200 guests each since then They created 2 brands to serve 2 different segments One is to serve mid-class segment with food and beer, which they have already built over years The other is to serve mid-high class, providing food-and-wine type and higher quality of service Both restaurants are still in growth stages, building its awareness and clientele bases in the areas

Products, service and market

Chateau restaurant serves 2 main types of cuisines One is Vietnamese traditional dishes They are combined in several set menus for Tourists The dishes are presented in creative ways using fruit and vegetable carvings to capture interests of tourists The other cuisine that Chateau restaurant offers is French Fusion The owner of the restaurant picked up some

culinary art from a popular restaurant from the 60s and added few twists to the original taste

to adapt to the local market This fusion style is welcomed by the local who appreciate different taste in the food & beverage market

Competition in restaurant business, especially in Ho Chi Minh city, is rather intense in recent years As tourist is the most attractive market, the number of new restaurants has been increased rapidly since the past few years to accommodate the increasing demands such as Quan Bui, Quan Ngon, Royal Saigon Restaurant, Cuc Gach Quan, Hoang Yen, KOTO, Viet Pho, Thuyen Buom, etc They mainly compete by price and commission for the tour operators and tour guides It is the key to bring the business to the restaurant Same as in the restaurant business, tourism sectors have also increased a lot with number of agencies and operators Most of them are also competing by price, thus, offer low quality of service Seeing the gaps, some of them start to stand out, focusing and providing better quality service, creating greater value rather than keeping lowering price That is also why Chateau Restaurant changed their strategy since to capture this upper market

Current management context and competitive position

SWOT Analysis

● Chateau restaurant was established in

1989 as a Tourist dining destination

Because of long history in serving

tourists, it knows well the needs of

tourists and has built good trusts among

the tour companies

● Restaurant located in an French villa

environment divided in different areas

which can be utilized for private

functions or groups of guests with

different needs

● Even though, there are different areas suitable with many functions, it could only host small functions with limited number of diners

● The restaurant has not yet been able to attract high skilled labors, who have more interest in international hotel chains It affects directly to the quality

of service and food

● It has old-French fusion taste in its

cuisine, which set its flavor unique

compared to its competitors It’s easy to

target to those Vietnamese who would

like to explore new cuisine but not yet

willing to experience the original taste

● The Vietnamese dishes are decorated by

using natural ingredients such as

coconut, banana leaves, pineapple, etc

which are attractive to Tourists

● Restaurant has good pricelist and

flexibility in payment from its suppliers

because of long good relationship with

them

● The price is rather reasonable compared

to the competitors (10% - 15% lower)

● Restaurant is located in District 3, 15

minutes away from Tan Son Nhat

Airport and 15 minutes to city center It’s

convenient for both airport and city

center guests

● Employee turnover is also a problem More than half number of employees only has short term commitment

● There is lack of standard operational procedures for every task It causes problems when there are new recruits and to maintain the quality

● Even though it has been established for nearly 30 years, its financial resource is still weak It was due to no financial plan The restaurant still uses 90% debt

to open the new premise in December

2016

● There is no clear marketing/ branding strategy for restaurant There is no brand awareness in Vietnamese-guest market

● Current facility is rather small, could not capture big volume of tourists in the high season

● The business depends heavily on seasons – Wedding season, Tourist season, and end year/ new year season

● The only sale channel is through long relationship and contracts with tour companies

● There is no guest loyalty program in place

● Number of tourists arriving Vietnam

keeps increasing compared to same

period in past years (Vietnam National

● Tourist market is tight with budget and highly sensitive with price

Administration of Tourism, 2017)

Moreover, Vietnam currently attracts

many investors and foreigners to come

and stay in country for a period of time

● Globalization and improvement in

income increase people’s willingness to

expose to Western lifestyle especially

cuisine

● Many big international F&B suppliers

entering the market such as Mega

Market (replacing Metro), Big C,

Coopmark, An Nam Gourmet, Good

Food, Nice Food, etc It helps to reduce

the selling power in the market and the

ingredients are more various

● Young generation grows up with habit of

eating out either for social or business

purposes This also creates on-going

demand for business

● Social media has been developed a lot

Most people use it for review and make

decisions

● Advanced technology nowadays can

capture history data of guests on their

selling behavior as well as their own

information

● More and more guests are aware of

health and environment impact

● Because Ho Chi Minh city is a commercial city with the most population, it is more expensive to run business than other cities Labor cost increases every year in average of 9-10% The rental cost in central districts

expensive

Table 1 - SWOT Analysis

Chateau restaurant has long history establishment in the market, which bring much advantages to business compared to its competitors However, even it has been in the market for nearly 29 years, it could not capture the potential growth it should have had The situation

and resources remain the same over years They have been only utilizing the advantages that they had from their relationship with other stakeholders, but they have neither improved and expanded their capacity nor created new opportunities and other advantages The market has changed with more opportunities and threats and Chateau restaurant has not been adapting

to those yet

Organization chart

Restaurant director is the legal representative for the restaurant She is also directly in charge

of marketing and sale department For the operation side, the operation manager is in charge directly all activities of the restaurant from kitchen, service to purchase and finance departments In general, restaurant director and operation manager work together to run entire restaurant operation Each department still has its own structure with manager, supervisors and staffs at below

Restaurant Director

Marketing

Manager

Operational Manager

Finance Manager

Purchase Officer

Marketing /

sale officer

Assistant Operational Manager

Service supervisor

Bar supervisor

Head chef

Chef

Sous-Chefs

Accountant

s

Bartenders Servers

Management style

The restaurant follows hierarchy management system Almost all the decisions are made by either restaurant director or operation manager The executive decision is given out directly down to staff level There is very little or lack of participation in the decision-making process across departments Staff mainly play role as to carry out the decisions from their managers Thus, the responsibility to maintain the quality and profitability is heavily weighted on restaurant director and operation manager Because of this ultimate authority, restaurant director and operation manager usually overwrite decisions made by the middle managers

to their staffs This causes the discredit on the middle managers and discourages them to make decision or take ownership

Service industry, especially, restaurant business depends heavily on human resource from the first impression when guests are welcomed at front door to the time when the guests leave the restaurant Every employee, especially in frontline positions, plays a significant part in creating experience and value to guests However, with this hierarchy management structure, control and quality of the restaurant is weighted primely on the capacity of the restaurant director and operation manager Being not able to exploit full potentials of their employees will cause restaurant difficulty to maintain the high quality of service and easy to lose its own competitive advantages in the market

This paper will focus on analysis of some problems that are from this traditional hierarchy management system, from which it will propose a system that helps to improve business quality by building employee capacity

PART 1: Analysis of employee capacity at Chateau restaurant

Chapter 1 - Instability of products & service provided

According to Trip Advisor, majority of guests satisfy with the food and service

General Guest Comments and Ratings from TripAdvisor

Since beginning, Chateau restaurant has been one of the well-known tourist destinations for dining However, the more it opened to other destinations, the looser control it has on its quality Taking close look, there are some extreme positive comments where some guests were very impressed with the value that they received while some guests were extremely disappointed with what they paid for and the gap of those extreme comments is quite close

Extreme Guest Comments collected from TripAdvisor

Collected from the comments on Trip Advisor, guests extremely impressed because the food

is cheap compared to its quality The food is very tasty, and its presentation is very creative and impressive The service is fast, friendly and helpful On the other hand, those with great disappointment complained because the food is cold and terrible The service is very slow The two extreme opinions show that there is a big gap in quality consistency

Consequences

Chateau restaurant faces difficulties in attracting new guests due to some of the bad comments that are public Despite of the excellent comments, bad comments with details create fear and hesitation for potential guests to make choices Moreover, the not-so-good feedbacks come back to the tour operators, which also leads to discreditation of the restaurant In brief, Chateau restaurant find challenges in both finding new clientele and retaining existing guests

Chapter 2 - The causes

Management

Management system is not very effective and stable The biggest problem in management is the application of hierarchical management where all decision is based on the top managers The idea and decision are limited to 2 top managers It causes inefficiency and ineffectiveness in both decision making and execution process Low efficiency is when the top managers must spend more time to explain and make sure every staffs understand the decision and supervise them to execute correctly Low in effectiveness is because middle managers might not play a significant role in ensuring the decision are carried out on daily operation They might not fully understand the whole picture of the purpose nor even agree

in some decisions made from the top managers, which sometimes happened in the restaurant Employees are in the frontline and in the daily operation They interact directly with guests

_ Lack of 2-way communication &

staff participation in business

operational decision

Negative cash flow

_ Hierarchical management style

_ Not clear vision / direction

MANAGEMENT

METHOD _ No control / supervision in process & procedure

_ Lack of standard recipe

_ Lack of Quality control process

every day Missing their participation might cause the misled decisions and they do not do with full intention what they think it could not work

Root cause of low effectiveness in management system lies on the capacity of top managers and perhaps also because of the motivation of staffs due to lack of vision and personal career development Indeed, there is no any on-going training programs for managers to build up their managemental skills and knowledge, especially for the operation manager who was from different industry when joining working at the restaurant 5 years ago Moreover, lack

of employee participation definitely adds difficulties on management itself It could be because of lack of personal career development plan put in place for them, thus, leads to lack

of their contribution and participation in company Right management skill is very important

in opening up employees’ potentials and capacity to create value for the business

Hierarchical management

No effective communication

One-way communication

No innovative management styles

No ownership

No motivation

No career development plan

No opportunity

Management style

Limitation in management vision

Low capacity

in management

Lack of experience

& training

Methods

The inconsistency in service and products is because of no quality assurance system in place There is a lack of standard recipes, no standard operation procedures nor quality control system The quality of the food and service relies heavily on the individual performance of the frontline staff If guests are served by good and experienced staff, they will have an outstanding dining experience On the other hand, if guests are served by not-so-good staff, they will have a very unpleasant experience There is no consistency in performance throughout staffs There is no control system that helps to ensure and maintain the quality of the service throughout restaurants

Quality of the service is difficult to maintain throughout all the restaurants because there is

no supervision in the daily operation process They have built some operational procedures but there is no sufficient supervision to ensure the procedures are followed through The mid managers lack management skills They are staff, who either have long experience working

at the restaurant or who have high potential However, there has been no training in management skills They do have skills and knowledge to run daily operation well but might

No critical control check points

Low capacity

in supervision

No standard recipes

No practical know-how

Incompetent staffs

No training provided

No standard operational procedures implementation

Low capacity

in management

not have sufficient managemental skills to run a team efficiently and effectively to deliver quality of service Not only for management staffs, some frontline staffs were recruited with

no or low hospitality competence Moreover, there is no regular trainings provided to them

Man Power

Human is the greatest asset in the service industry They create the atmosphere and experience from the first impression with the welcoming to the satisfaction with the service and food at the last moment before leaving the premise Therefore, the dining experience relies heavily on the interaction and performance of frontline staff Proactive and quality staff will bring much value to the quality of the business and that Chateau restaurant needs

No motivation

No recognition

No personal development plan

No clear direction

No effective communication channel

High turnover

No support system

No effective training program

No effective orientation program

No effective training packages

No high competent staff

No right recruitment process

No quality control in process

No training program

No employee capacity building program

No creativity

No

Chateau restaurant encounters difficulties in both motivation and competency from their staff That constrains the growth as well as quality delivery The problem of motivation comes from the lack of ownership, participation and the feeling of belonging, being a part

of the business There is a lack of recognition on the excellent performance to set an excellent example for others to follow The restaurant has applied the performance evaluation on regular basic The result will affect the amount of allowance that staff will receive contributing to their salary every month However, most of the staff are rated almost perfect with 95% and 100%, except when there are incidents that happen The system seems to be like punishment system when someone does something wrong Employees will be punished

by the reduction in their allowance Furthermore, there is no any further analysis on performance reports Thus, it does not definitely serve its prime purpose which is to help identify the weakness and the gaps of the performance and help improve it

The staff is not invited to participate in any executive decision making It makes staff not willingly to take ownership, initiative or any responsibility for business success They do not feel as a part of the business Additional to that, staff is not introduced to any career development plan They do not know what company could offer for them in term of career building, or rather, they cannot see their future in the company It creates difficulty in keeping them motivated and delivering best performance

Competence is also an issue in the restaurant Restaurant service is more than bringing food and beverage to guests and clearing when they’ve done It is more about creating interaction, experience, pleasant and hospitality to guests Most of the staff in the restaurant know how

to clean, set up, clear tables but they don’t have the right interpersonal skills – customer service, effective communication skills including language skills, problem solving skills, teamwork, flexibility, organising skills and time management skills Supervisors and managers know how to serve guests, to interact effectively with guests but lack delegating skills, service quality controlling skills, decision making skills and staff managing skills including counselling and conflict solving skills Almost of mid managers used to be senior staff They were promoted to upper position because of their long commitment and operational experience at the restaurant In general, staff at different levels do not have the sufficient competence to perform their responsibility They do not have proper and sufficient

trainings for their tasks No proper training, no support system, and no feeling of ownership leads to high staff turnover

Lastly, restaurant does not have proper recruitment process to find right employees with right skills There is no system to orientate right employees with right set of skills to the right tasks There is no job analysis and job specification in place to guide in the recruitment process This gap also affects the general competence, thus, quality of the restaurant

PART 2: Building employee capacity’s role in performance and

quality improvement

Chapter 1: Suggested solutions

As in any other industry and business, the success of the organization based on how effective

they can utilize their resource to create the greater value The key resource of Chateau

restaurant is the human, or rather, employees’ capacity To improve the performance of the

restaurant, it is required a performance management system to monitor and improve

individual performance of employees Performance management system should be covered

from the time when the job is created, candidate is interviewed till the time when they start

working and growing in the organization

Performance Management in Human Resource

Job analysis should be updated continually every year to add on more relevant and essential skills which will bring continuous improvement on the performance quality

Job analysis process