WrapItUp- a California-based restaurant chain offering made-to-order sandwich wraps using fresh, healthy ingredients- was founded by Shawn

Jackson and Simon Sethi, in Northern California in the year 2002, while studying in graduate school. It was started off as a small food joint by its founders from the kitchen of their own apartment in school campus. The idea later became their full time business after graduation. Since then business kept growing and took a shape of a restaurant chain. With growth the chain suffered from HR issues and was not able to retain its top talent. Turnover was high, recruiting was disorganised and cost of recruiting new people was also becoming an overhead. Recognising the need of expert help two CEOs decided to hire Martha Reyes, an industry veteran with years of work experience in various managerial and HR positions in the industry, in 2010. At present she is handling the project on new compensation plan in the company to reduce the employee turnover rate. When she held the post, restaurant chain was in bad financial health in terms of net profit. The bottom of the problem was higher employee turnover. Employee turnover rate was higher than the industry average. This higher employee turnover ratio affected customer satisfaction that led to reduction in overall profit. Reyes has the challenge to improve the employee turnover ratio and to increase the flattening profit margins for the chain. There were few issues with their existing HR policies: Very basic and, arguably, rudimentary HR policies Non-strategic approach to compensation Recruitment was done just to respond to the emerging vacancies without any serious attention There were some loopholes in performance management Managers were not given enough incentives for their hardwork Flat structure of incentive plan failed to encourage and motivate emplyees

With the help of an external consulting agency, Reyes planned to develop a program called ShareIt, intended to make store manager compensation more flexible and to motivate managers to improve individual store profit. This program was rolled out in two stores as a pilot test for six months period. The two stores were, one in Santa Monica and the other one in Costa Mesa. ShareIt programme required to monitor before and after working hour performance and to collect regular feedback from the initial participants. After a meeting with two store managers and their associates, programme was rolled out. Both the managers initially showing concerns over increased workload they might have. But at the same time they were excited about the increased compensation potential and freedom to innovate and change their menu, within a certain limit, according to them.

Now Reyes has following alternatives: keep the programme as it is and roll it out to other stores also obtain additional data by running a larger trial temporarily stop the programme and modify it abandon it and try something else

By looking analysing the case facts we have come across few decision points which would help in deciding the future course of action for the management. One, the restaurant chain had some serious issues with its existing compensation plan. Top talent had been leaving the company and they had been failing to attract talented people. Does this current programme address the issue? Two, the motivation and incentives had not been appropriate for the talented and efficient employees. Does the current programme help in motivating and encouraging more employee involvement? And finally, is this programme going to work for all the stores? Based on these points we observe that the result of the programme showed improvement in profitability. Stores have been able to increase their profits and have been able to increase the incentives for managers. However we also see some margin for improvements in the programme. There is no such mention in the case that how the employees should be motivated other than giving improved incentives. There should be some metrics to measure the employee satisfaction level also. This can lead to have better satisfied pool of employees which in turn would yield high profitability with improved customer satisfaction. With such considerations in mind Reyes should roll out the programme in all its stores.