Question

You are the owner of an upscale, medium sized sports bar/restaurant in the downtown core. Your restaurant employs a total of 50 people working various shifts from 10:00 am to 4:00 am (with the exception of the kitchen prep staff as they arrive at 6:00 am to prepare food for the day). You have received a number of complaints from your staff suggesting that

compensation in your restaurant is unfair as some staff members are making significantly more money than others. To address this concern, you decide to examine several of the key jobs within the restaurant more closely. Using the table below, score the following jobs: line cook, server and bartender; and determine what each job should pay based on the total points allocated. Note that, as a benchmark, the head chef earns an annual salary of $75,000 and the restaurant assistant manager earns an annual salary of $60,000 per year. (If you prefer to determine compensation based on an hourly rate, convert the benchmark salaries assuming a 40-hour workweek).

a. The number in parenthesis beside each factor refers to the weight (importance) of each factor and sub-factor in determining compensation. In your view, are the assigned weights appropriate? Why or why not? Are there any additional factors important any of the above listed jobs that are not included in the table?

b. How close did your estimates align with the market rates?

c. As restaurant owner, you have also noticed the large discrepancy in earnings particularly among bartenders

Answer 1

Evaluating compensation within a sports bar/restaurant involves examining the roles of line cooks, servers, and bartenders, considering factors affecting pay, and ensuring pay aligns with market rates and job complexity. Additionally, addressing the tipping system is essential to manage income disparities, especially for roles relying on tips like bartenders. Fairness in compensation also takes into account employee experience, education, and skills matched with industry standards.

Step-by-step explanation:

In addressing staff compensation concerns within an upscale sports bar/restaurant, an evaluation method considering job responsibilities and market rates is applied. This includes examining factors such as skill level, responsibility, and the physical and mental demands of positions like line cooks, servers, and bartenders. Weights assigned to these factors determine their impact on compensation. Market comparisons are vital; for example, if a line cook and a server is performing at similar levels of skill and responsibility, their pay should be comparatively aligned. Ensuring fairness in compensation is not just about adhering to legal standards like minimum wage but about recognizing the value and complexity of each role within the business.

Moreover, addressing the controversial system of tipping is crucial. Some staff members may earn a "subminimum wage" expecting tips to compensate for their low hourly rate, creating instability in earnings. It's key to note how different workers, like the front of house staff, may share tips, while others, like kitchen staff, typically do not. This can lead to discrepancies in earnings, which is even more pronounced for bartenders who often rely heavily on tips. Measures ensuring fair distribution of tips or restructuring pay scales can be necessary for fair compensation.

Aligning with market rates and industry standards while also reflecting the level of skill, responsibility, and the physical and mental demands of the job, can help determine an equitable compensation plan. While the head chef's annual salary stands at $75,000 and the restaurant assistant manager at $60,000, the salary for each job must also be fair and competitive, factoring in elements like experience, education, and skill