"Recognition is key
to making people feel good." says Joe Redmond, Vice President of Marketing
and Co-founder of K-CARE. K-CARE is an employee recognition program created
initially for K-BOB's Steakhouse, a restaurant franchise based out of
Albuquerque, New Mexico. "This reinforces the message that the company
cares," explains Redmond. In food service, an industry that is notorious
for their low retention rates, letting employees know that management
cares for their well-being is crucial. The industry standard is over a
100% turnover rate each year. It is estimated that the turnover cost of
one restaurant employee is $2,490!
One year ago, K-BOB's
surveyed its employees and discovered that only 33% were likely to refer
the company to their friends as a great place to work. The question, "Does
the company care about me personally and professionally?" yielded
a similar response. K-BOB's actively went to work to create a marketing
program for its internal customers. "You have to market to your
internal customers because they are your front line," says Redmond. That's
why K-CARE was created: to increase job satisfaction, recognition, employee
satisfaction, and retention for the restaurant industry.
The
Program
The K in K-CARE doesn't come from K-BOB's, but rather from
the K in 401K. It is a 401K-type program. Employees earn money through
the program but have to remain with the company for at least a year before
withdrawing any money; then withdrawals are limited to 50% each year.
K-CARE is a "Show me the money!" incentive program. It targets tip reporting,
education, employee compensation and benefits, and overall, rewards for
doing a great job.
K-CARE also promotes teamwork because it takes everyone's effort to serve
the guests and keep them happy. The entire staff (servers, cooks, hosts/hostesses)
benefits from the program based on the servers' reported tips and the
hours worked by each person during the pay period.
There are four ways
where employees can earn money:
1. Tip
Contributions:
"Important thing about tips is, tips register customer satisfaction."
Servers report
tips and the company deposits cash into all employee accounts equivalent
to 5% of the total reported amount, based on the hours they worked.
Employees want to report their tips because they earn more for being
truthful.
K-CARE is the First
Industry Created EMTRAC (Employer Tip Reporting Alternative Agreement).
2. Vacation
earnings:"They want to report tips because they get vacation at a higher rate
of pay."
Based on reported
tips, employees receive vacation earnings at a higher rate of pay.
Again, the more they
truthfully report their tips, the more they earn.
3. Continuing
Education:"If you give 110%, you will receive 110%."
Employees may select
courses, such as health and food sanitation, offered by the National
Restaurant Association Education Foundation, The employee pays for the
course up front, 100% of it, but upon successful completion receives
a rebate for 110% of the cost.
4. K-CASH:"It's the caring that counts."
On birthdays, employees
receive $20; on their yearly anniversary, $50. The K-CARE software,
which works directly with the company's payroll software, integrates
these benefits with the payroll and the 401K program. It incorporates
incentive programs such as, "whoever serves the most desserts, wins
this award." All the cash and awards are paid in K-CARE dollars.
Program
Costs
Initially, a restaurant invests $3,000 up-front for the
cost of the software, the K-CARE communication board, and the other materials
needed to create a successful program. The ongoing K-CARE subscription
is $50 per month or $500 per year for the 24 x 7 software support and
materials.
K-CARE estimates
that the annual cost of the program, including the investment contributions
to the employees, should equal .7% to 1% of the sales revenue each year.
The
Incentive Rewards
In other words, employees earn money, vacation days, education, and recognition!
The
Motivating Factors
Through the K-CARE program, employees receive certificates
at home in the mail with their account balance. Progress is also reported
on the K-CARE communication board, which is strategically placed in the
kitchen or most convenient work area. The board posts the birthdays, anniversaries,
account balances, and K-CARE news. It provides the account balance for
the whole team to see so that newer employees will be motivated by the
big bucks earned by the older employees. "They see that Susie has $1,000
in her account. They know that if they stick around and work hard, participate
in continuing education, win contests, this is how they get that sort
of money," says Redmond.
Employees want to
report their tips because the more they report, the more they earn. At
the end of the year, employees have money to spend on vacations, holiday
expenses, and personal gifts.
Because K-CARE is
an IRS approved program substitute for TRAC (Tip Reporting Alternative
Commitment) agreements and the program has on-going communication to reinforce
the fact that by law servers must report their tips, restaurants are able
to avoid audits because the IRS knows that employees are more likely to
report tips.
Return
on Investment
By implementing K-CARE for its staff, K-BOB's was able
to lower turnover by half. Within a year, 61% of employees said they would
refer the company to their friends as a great place to work: a great improvement
over the previous year's 33%. Reported tips went up 20%. For K-CARE, the
return on investment is undeniable.
