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Presentation given by Warren Dietel, President/Owner of Puff 'n Stuff Catering & Events, at The Special Event conference on January 25, 2011.
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Incentive Plans That Drive Accountability
Presented by: Warren Dietel
About the Speaker
• Family business began in Trinidad as pastry shop
• Entrepreneurial from the start • Professional Experience
– Car Detailing, Puff ‘n Stuff Catering, Disney Weddings, Disney Institute, Scott Kay, back Home!
• Industry Involvement – ICA Board Member, Regular Speaker for
Catersource, The Special Event, and NACE• What drives me
The Puff Story• Opened in Central Florida in 1980 as a family-owned business• Purchased in 2003, annual sales of $1.8 million, at operational limit• Antiquated infrastructure with inefficient space & poor equipment • Tremendous potential + aggressive growth plan = 267% growth in 3 years
• 40+ Full-Time Team Members and 200+ On-Call • Diversified business segments and multiple markets
It’s all about People & Culture
“When employees think, act and feel like owners… everybody wins.” - Jack Stack
• Build a culture of employee engagement– Acknowledgment of individual contributions– Trained leadership delivers supportive feedback– Collaborative working relationships– Empowerment that promotes success– Expectations that set clear challenging and
attainable performance goals– Show you/the company cares– Trust and get out of the way
Before We Get to Carrots and Sticks
Every Employee…Should be given the measures of business success and taught to understand them.
Know and Teach the RulesShould be expected and enabled to act on their knowledge to improve performance.
Follow the Action & Keep ScoreShould have a direct stake in the company’s success, risk or failure.
Provide a Stake in the Outcome
The Principles of The Great Game of Business
Open Book Management
• Running a company in a way that focuses everyone on helping the business be successful.
• Employee goals and accountabilities are tied directly to the success of the company.
• All employees are taught the Critical Numbers and how THEY can make a difference – both individually and as part of a team.
Additional Inspiration
•Why do them?•What motivates employees?•Money•Performance pay•Recognition/Appreciation
•Placing value on the behaviors driving company objectives
•Incentive programs are usually viewed as positive•Accountability can be a negative•Balance of both is critical
Building a Case for Incentive Plans
The role of a good manager/leader is to guide employees to work on what
is most important in the most efficient manner.
•Clear expectations – upfront •Make it measurable •Make sure it is right the first time – difficult to change•Review by labor consultant/attorney •Easy to calculate •Campion to manage the process •Begin with the end in mind – what is your desired result?
How to do it ... EFFECTIVELY?
Wouldn’t it be great if everyone in your
organization had a real stake in the outcome and understood how they were individually impacted by
company success?
KISS• Keep it simple and special (KISS)• Good plans = easy to implement and follow • Be clear about what incentives are and how employees can
earn them• Plans that require tracking performance indicators that are
too detailed waste management's time and confuse employees
What Not to Do!
• Programs structure is targeted too broadly/ not focused on individual people or teams
• “All for one” style programs - Unmotivating- Enttitlements- Causes productive employees to resent poor performers
DO: • Provide clear understanding of links between effort and incentive
compensation• Motivate each department or individual to focus on things they can
control• Encourage behaviors that create successful results
Catch employees doing something right and make sure everyone in the company sees that management recognizes it.
Incentive Plans Discussed Today:
•Sales Incentive Plan•Event Supervisor Incentive Plan•Department Manager Incentive Plan•Employee of the Month
• Special Event Planners will be assigned annual goals based on market, prior experience, and company needs
• SEPs are assigned to specific vertical markets and venues• Opportunity to sell outside a defined market is available through
relationships• Commission paid at 8.5% of gross monthly sales• Non-profitable sales will not be eligible for commission (30% margin
required)• Plan accommodates 2 to 1 administrative support ratio at current sales
goals• Poor performance is addressed from a disciplinary point of view• Lead rotation/generation will have set parameters• Vacation and Leave of Absence guidelines
Sales Commission Plan
Annual Bonus Opportunities
• Additional 5% over annual individual goal bonus paid on excess
• Additional 5% over annual team goal bonus paid pro rata on excess
• Define where individuals can be successful – Creates protection for existing SEPS – Creates opportunity for newcomers
• Inbound calls, leads and inquiries “filtered”
• Filtered by market and routed to sales person/event planner
• Relationship is EVERYTHING!
• Outbound marketing encouraged
• Within 24 hours, next SEP in rotation responsible for acknowledging/ accepting the lead, no matter how large or small the scope of work associated with the event
• Dispute resolution
Lead Generation
Com
mis
sion R
eport
s
• Drive behavior through opportunity to earn beyond hourly wage
• Event labor charges must be profitable for opportunity
• Earning opportunity based on desired behavior: – Staff Profitability– Customer feedback – survey – Leadership – Condition of returned equipment – Condition of vehicle – Creativity & execution – Mystery shopping – Balanced scorecards are reviewed by direct
manager and behavior is graded
Event Supervisor Plan
• Reviewed weekly by Director of Catering Operations • Events scheduled to 45% budget• Labor variance report generated by manager • 30% of positive variance becomes eligible for SIP
An Example:Staffing sold at $1,000Budget at 45% or $450Actual labor cost of $400 or 40% Budget $450 – savings of $50 multiplied by 30% = $15 into Supervisor opportunity.
Calculating the Incentive
Name: Blair, Tommy
Department - 300
1/1/2010
January Labor Savings @ 30% $343
Criteria (scored 1-5) 1/7-1/13 1/14-1/20 1/21-1/27 1/28-2/3 Score
Completed Manager's Report 4 5 4 2
Condition of Vehicle 1 4 5 5
Condition of Equipment 3 1 2 3
Client Feedback 4 4 2 5
Mystery Shop (2 per period) 4 4
Points for the Month 12 18 13 19 62
Elegible Points 90
Payout Structure
Opportunity $343
Multiplier (below 50% no payout) 69%
Actual Payout $236.29
Earning the Incentive – Driving Behavior
• The MIP incentive target is determined as a percentage of base salary
• Management participation in the plan will be at one of three levels:– 25% - Senior Department Leaders & Managers– 20% - Mid-Level Department Managers – 15% - Area Supervisors and Key Leads
• MIP is based upon company annual/monthly revenue targets
Management Incentive Plan - MIP
• MIP revenue targets will be calculated based on the following schedule:– Level 1 = Flat/below 2010 revenue = 25% payout opportunity – Level 2 = 60% of 2011’s revenue objectives to goal = 50% payout opportunity– Level 3 = 90% of 2011’s revenue objectives to goal = 75% payout opportunity– Level 4 = 100%+ of 2011’s revenue objective =100% payout opportunity
• For example: – Manager salary $50,000– Mid-level Manager at the 20% salary incentive opportunity or $10,000
maximum incentive – Company achieves 100% revenue goal - 20% of salary – eligible for $10,000
incentive - OR -
– Company achieves 90% revenue goal – 75% of $10,000 opportunity – eligible for $7,500 incentive
Management Incentive Plan - MIP
Goal Classification Percentage of payout
Iron Triangle – Labor, cost, and controllables 70% of target payout
Departmental OT Goal 15% of target payout
Individual Leadership Goal 10% of target payout
Individual Development Goal 5% of target payout
Earning the Incentive – Driving Behavior
• Individual performance is measured monthly• Incentive will be paid annually using the goal classification and percentage payout
outlined below
• Peer driven and controlled • Added to website• Announced monthly in front of
peers• Dedicated parking space with
name• $100 gift certificate to local
restaurant group
Employee of the Month
Final Thoughts
Employee incentive programs are a very powerful
concept when employees can understand and
see the connection between their
performance and their rewards.
“When you give a little respect you get a more
effective organization, with reduced turnover and
absenteeism and employees at all levels
who are engaged, focused, and committed to succeed as a team. In short, you get maximum ROI from
your organization’s most powerful resource: its
people!”
Paul Marciano, Ph.D.
