QUIZ by yaoyufang


									Providence College                        472.21                         Human Resources

To create:

   -   An incentive package for employees of Pembina Pita franchises

Who You Are
You are the newly-graduated daughter (or son) of the owner of the franchiser of Pembina

Pembina Pita?
Your mother, Frances Janzen, started a company five years ago called “Manitoba
Holding 485906 Inc.” It‟s the parent company for franchise operations in 10 towns in
southern Manitoba—Pembina Pita.

Your mother is a smart business-woman who has run a successful catering business for
over two decades. Seven years ago she realized that there was going to be a market for
healthy fast food. “I‟d been reading about the „epidemic‟ of overweight children, and
how it was caused by fast food,” she said in explaining the origin of the company. “Most
parents are over-protective of their kids these days and, as soon as they think there‟s a
danger, they want to keep their kids from it. So if fat was going to be the new threat,
healthy fast food would be something parents would buy. And, if the food was good,
kids might even want it to.”

Your mother did extensive research on fast healthy foods, including in Europe and
realized that pitas were probably the best option. “They were easy to make, so I wouldn‟t
need to set up a long training program for employees. Most of the ingredients were cold,
so we wouldn‟t need stoves or cook-tops. And it would be easy to have man different

So, after putting together a business plan, your mother went to the bank and got a start-up
loan to open a location in Morden. It did well enough in the first year that she was able
to convince a friend to open a franchise in Winkler. At the end of the second year, a
businesswoman in Steinbach approached her about adding two more franchises. Over the
last five years, Frances found six more franchisees, all in southern Manitoba.

Recently, Frances was interviewed for Venture. “I guess I have a pita empire now,” she
said. “The best thing is, we were ahead of the curve. In the last couple of years, bigger
companies have come to the same conclusion about healthy fast food we did, and have
started setting up franchises. Fortunately, they haven‟t paid attention to anywhere outside
Winnipeg. And, because we were first, we have loyal customers and franchisees.”

The franchisees are loyal, in part, because the franchise fees are low. Frances has plowed
any money she‟s made into advertising, and into improving the franchise locations.

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Over the next five years, Frances is planning on looking at franchising in Northern
Ontario and in other mid-sized towns in the Prairie Provinces.

She also wants to set up an effective incentive bonus program for employees of the

While the Pembina Pita franchises have been expanding, you were taking the business
program at Providence College. You‟ve been working weekends and summers in her
first franchise all the way through school. You finished your third year last spring.

This summer, your mother pulled you out of the franchise and set up a “head office” with
you—really it‟s just a room in the basement of her house. Your job description is not
well-defined. “Now that we have franchises,” your mother told you, “We need to start
paying attention to „head office stuff.‟ I‟m out in the franchises every day, and I need
you to take focus on getting our company organized.

Pembina Pita has always had an “open book” policy, where any employee can see the
financial information of their franchise. As well, franchisees have always been able to
see the financial information of all the franchises, and of Manitoba Holding 485906.
Franchisees appreciate this information, as it helps them see that their franchise fees are
spent furthering the company—and it helps them compare their franchise against
everyone else‟s.

Over this last summer, you set up a consistent accounting system for all the franchises.
It‟s not really high-tech, but now each franchisee uses the same accounting software and
the records all revenue and expenses using the same accounts, and then e-mails monthly
reports in to you. The franchisees wanted this because it allowed them to compare
“apples to apples” and see exactly where they stand. It has also allowed you and your
mother to notice trouble spots sooner.

You have also started to set up a centralized hiring system, with all applications coming
to you. Your mom and the franchisee will continue to do the interviewing together; the
applications—and the reference checks—will all come through „head office‟. Head
office will also keep track of hours.

At your last weekly corporate meeting, your mother has asked you to put together an
incentive plan.

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Providence College                        472.21                         Human Resources

Your mother has always donated 10% of company profits to the church. At first, there
weren‟t any profits. However, as the company has become established, profits have
begun to grow. They hit $100,000 last year—so the company made a $10,000
contribution to your church.

“We need to have a profit-sharing incentive plan that matches what we give to the
church,” your mother told you. “I‟d like to take 10% of profits and distribute them out to
both the franchisees and front line staff. We‟re expecting to grow our profits 20% this
year, which means we should have $12,000 for this program next year. I know it‟s not a
lot, but it‟s a start.”

You‟ve reviewed the staffing at each of the franchises and figured out that, on average,
there are 10 employees at each franchise. If every employee got the same amount that
would mean each employee would get $120.

When you floated this idea to your mother, she wasn‟t keen on it. “I don‟t want to give
everyone the same amount. Some of the franchises are doing better than others and now,
with this new accounting system, we know which ones those are. And I know that some
employees work harder and are more loyal to the company than others. Some people
have been working with us right from the beginning and have had a lot to do with the
success of the franchises. Others are just working a couple shifts and only put in their
time. I want to use this money to build an incentive program that will motive people—
that will reward them for hard work and success.

”We have our monthly meeting of the franchisees coming up next week. I‟d like you to
make a presentation to them that outlines how a program like that could work. I‟ll want
their input and advice, but the final decision will be made a „head office‟—you and I.”

How The Simulation Will Work
Each of the four groups will act as if they are the daughter making the presentation. The
class will act as if they are the franchisees and Frances Janzen.

You are welcome to make your presentation in any form you like. If you really want to,
you can use PowerPoint.

You are free to develop any kind of incentive program you want. A few suggestions that
you might want to consider are:

   -   Setting up an employee evaluation program, with individual incentives given out
       on that basis.

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Providence College                         472.21                           Human Resources

   -   Setting out an annual reward program for the franchises—things like “most
       improved sales, greatest profit, most satisfied customers” and giving out cash
       along with the rewards.
   -   Setting aside a certain percentage of the 10% to go to franchisees and a certain
       percentage to go to employees at the franchises.
   -   Have it all go to the employees and none to the franchisees.
   -   Giving it to the franchisees (based on some criteria) to distribute as they see fit.
   -   Giving out bonuses for number of years working with the company.
   -   Giving out bonuses on the basis of customer comments nominating outstanding
   -   Offering job training „scholarships‟ for outstanding employees (however they are
   -   Social events—bowling nights, paintball contests, etc.—for the most successful
   -   A productivity bonus system.
   -   A quantity or quality bonus system.
   -   Who should be doing the appraisals?
           o Franchisees only
           o Head office only
           o Customers only
           o Co-workers only
           o A combination
   -   What should the basis of the appraisal be?
           o Customer satisfaction
           o Productivity
           o Quality
           o Profitability
           o Profit growth
           o Revenue growth
           o Submission of ideas for new products and improved service
   -   How should the assessments be done?
           o Annual job reviews
           o Customer comments
           o „Inspections‟ by „head office‟

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           o Written franchisee reports

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