DOMINOS PIZZA

DOMINOS PIZZA
Type :Public (NYSE: DPZ) Founded :1960 Headquarters Ann Arbor, Michigan Key people : Tom Monaghan, Founder David Brandon, Chairman & CEO Industry Restaurants Products Pizza sandwiches pasta chicken wings desserts Revenue $1.462 billion USD (2007) Employees 145,000 Website www.dominos.com

Typical Worker on fast industry

Low Pay Part Time Closely Supervised High Turnover In the case of Dominos Pizza
Multitasking

Case Summary
Main Problems Dominos is Facing employee high employee turn over rate
Store Manager leave every 3 6 months Lower level employee turnover rate 300 %

Company Policies avoid increasing basic wage How they Handle the Problems Recruit better store manager by implementing new test Improving employee skills by training the weak points

Case Summary
How they Handle the Problems (Cont.) Providing facilities for store to see their records Better financial incentive Better improvement training

Main Discussion.
Why is Dominos Facing High Turnover Rate ? What is the Impact of high turnover rate to Dominos Is it really effective not to increase the basic wage oppositely like starbucks does? What is really needed to reduce employee turnover rate?

Why dominos is facing high turnover

What Drives People to Quit Jobs

Compatibility with they work reviewed from their basic education, interest, experience, compensation and any others. The Amount of salary and fringe benefits with any others benefit (career, training & management development) Relationship between human either vertical and horizontal (superior treatment and relationship with subordinate and colleagues).

What Happen In Dominos

Low Pay (obvious) Lack of relationship between boss and worker. Mean colleague + boring days Lack of leadership element (note that store manager leave ever 3-6 months) Main Problems is : Store Manager

What is the Impact of high turnover rate to Dominos ?

Positif Impact from a turnover

Opportunitis to get employee whos have better experience and ability Company can employ new employee whos got new ideas yang memiliki ide-ide baru which can create inovation in exist governace work Can decrease the average of employee work period which can reduce the cost of salary that must be paid. Can give a chance to talented and high performance. If the employee whos quit the job has a poor performance or employee of a gadfly for the same team working in the organization

Negative Impact from a turnover

Employee Repo cost Learning cost What they out for worker are more less than they get from new worker. Level accident new employees, usually tend to be higher There is a production that has lost during turnover Production equipment that cannot full operate A lot of waste because of the new employees

Impact On Dominos
Its cost money to recruit, hire, and train people, and undercuts service when inexperienced employees dont work as efficiently The Financial Cost is estimated as :
$20.000 for each store manager leave $2.500 for each hourly worker leave

Is it really effective not to increase the basic wage opposite from what starbucks does?

Different Approach Used

Distinct characteristic of fast food business were, high dependable on lowpaid workers. Small problem could trigger worker to seek another job in another company. Some company using approach of giving high initial salary.

Money Isnt Everything

Domino using different approach, where they didnt raise salary They believe working environment and quality of store manager play important role in turnover rate They believe when store manager position turnover is high, it will has ripple effect to the layer below

Future Orientation : Store Managers Wanted

So they try to focus on recruit high quality store managers Dominos is selectively hiring store managers, train them, and motivating them with rewards They coach and demand store managers to create better working environment

How they Handle the Problems?

Recruit Better Store Manager Give Store Manager Better Tools More Meaningfully Incentify Store manager

Recruit Better Store Manager

The Role of a Store Manager :
better working environment To motivate other workers or subordinate Increase job involvement among workers

Recruit Better Store Manager

The Role of a Store Manager :
To create better working environment To motivate other workers or subordinate To Increase job involvement among workers

Characteristic of a good store manager

Dimension 1. Extraversion : Outgoing, talkative, sociable, assertive 2. Agreeableness : Trusting, goodnatured, cooperative, softhearted 3. Emotional Stability : Dependable, responsible, achievement oriented, persistent 4. Emotional : Stability Relaxed, secure, unworried 5. Openness to Experience : Intellectual, imaginative, curious, broadminded

The Process of Getting a Better Store Manager

Recruitment
Managerial and Financial Skill is needed People Management

Development
To enhance managers weakness which assessed during recruiting process Continuous Development guided by franchise owner or headquarters

Supporting Tools for Manager

Managers need to be equipped and weaponized with better tools to provide easier managerial handling on their subordinate The weapon include :
Better IT system Better FAQ system Better managerial control system Better business process/operational efficiency

Supporting Tools for Manager

Computerized Tracking System FAQ Management Dominos Pulse System Dominos Next Generation Store System New Domino Next Generation Store System developed by Microsoft

Key Benefit of The system

Total cost of ownership. The solution is designed to lower the total cost of ownership by delivering superior price performance and reducing administration cost Lower Risks. The solution is designed to help address industry mandates and avoid unnecessary risk and related costs Security. The solution is designed to minimize risks, Microsoft is optimizing and better securing solutions that reduce complexity while supporting rigorous service levels. The solution also monitors fraudulent activity

Sustainable Incentive Programs

formal scheme used to promote or encourage specific actions or behavior by worker. The scientific literature also refers to this concept as Pay for Performance. Dominos is using the concept of sustainable incentive to improve workers job involvement

Incentive program
Type of Incentive : Employee Incentive Consumer Incentive Dealer / Channel Incentive Sales Incentive Type of Reward : Cash Reward Non Cash Reward Non Monetary Reward

Rewards for Managers & Employee

Employee Stock Option Plans
Company introduced program that grants stock options to about 15% of store managers based on criteria such as sales growth and customer services

Suggestion Rewards :
A simple Thank You appreciation of good work Treat your employee with respects Start birthday program Have employee field trips Casual lunch with staff

Final Result

Final Result
The result is significant: employee turnover rate declined to 107%. Far below previous, and average industry

Statistical improvement from using new managerial tools

In case you havent figure it out : IT IS GROWING