Building employee capacity to improve service quality and performance in chateau restaurant

HO CHI MINH CITY OPEN UNIVERSITY UNIVERSITÉ LIBRE DE BRUXELLES SOLVAY BRUSSELS SCHOOL OF ECONOMICS & MANAGEMENT MBQPM TRAN ANH THANG BUILDING EMPLOYEE CAPACITY TO IMPROVE SERVICE QUALITY AND PERFORMANCE IN CHATEAU RESTAURANT MASTER FINAL PROJECT MASTER IN BUSINESS QUALITY AND PERFORMANCE MANAGEMENT Ho Chi Minh City (2018) HO CHI MINH CITY OPEN UNIVERSITY UNIVERSITÉ LIBRE DE BRUXELLES SOLVAY BRUSSELS SCHOOL OF ECONOMICS & MANAGEMENT MBQPM TRAN ANH THANG BUILDING EMPLOYEE CAPACITY TO IMPROVE SERVICE QUALITY AND PERFORMANCE IN CHATEAU RESTAURANT MASTER FINAL PROJECT MASTER IN BUSINESS QUALITY AND PERFORMANCE MANAGEMENT Tutor: Jacques Martin Ho Chi Minh City (2018) -1- DECLARATION OF AUTHENTICITY I, the undersigned, _, declare that this final project is my original work, gathered and utilized especially to fulfil the purposes and objectives of this study, and has not been previously submitted to any other university for a higher degree and that all the assistance received in preparing this thesis and sources have been acknowledged _ Signature _ Date Name in Block -2- ACKNOWLEDGEMENTS This work would not have been possible without education and knowledge that have been transferred by Solvay Brussels School of Economics and Management professors who have spent their time and effort coming to Vietnam to teach Especially, I would like to take this opportunity to express special gratitude to Professor Jacques Martin, who is the professor, mentor and tutor guiding and helping this work done I am grateful to all of my classmates with whom I have had the pleasure to spend time with them in the past 15 months I have learned so much from their skills, knowledge and professional experience Lastly, I also would like to show my appreciation to my colleagues, friends and family members who gave me much support during my study and this final project -3- Academic Tutor: Professor Jacques Martin Practical tutor’s comments: Approval signature _ -4- Table of Contents INTRODUCTION Corporate background and management structure History Products, service and market Current management context and competitive position Organization chart 10 Management style 11 PART 1: Analysis of employee capacity at Chateau restaurant 12 Chapter - Instability of products & service provided 12 Consequences 13 Chapter - The causes 14 Management 14 Methods 16 Man Power 17 PART 2: Building employee capacity’s role in performance and quality improvement 20 Chapter 1: Suggested solutions 20 1.1 Job analysis 21 1.2 Recruitment and onboarding 22 1.3 Rewarding and Recognition 27 1.4 Performance appraisal 28 1.5 Disciplinary processes 29 1.6 Learning and development 30 1.7 Succession planning 36 Feasibility matrix 37 Conduct change 39 Chapter 2: Expected performance improvement 41 Conclusion 42 Reference 43 Appendix A – Job analysis template 44 -5- List of Table Table - SWOT Analysis Table - Job Analysis Measurement and target 22 Table - Job Analysis Measurement and target 23 Table - Accessing Candidate pool Measurement 24 Table - Screening Measurement 24 Table - Interviewing Measurement 25 Table - Onboarding Measurement 26 Table - Rewarding & Recognition Measurement 27 Table - Performance Appraisal Measurement 28 Table 10 - Disciplinary Measurement 29 Table 11 - Training programs 34 Table 12 - Learning and Developing Measurement 34 Table 13 - Succession Planning measurement 36 Table 14 - Feasibility Matrix 38 -6- INTRODUCTION Corporate background and management structure History Chateau is a family owned restaurant with long history It was established in 1989 It serves Vietnamese and old-fashioned French Fusion cuisines Starting with tourists as the primary guests, they have built and enjoyed good relationship with tour operators and tour agencies for many years This market was the sole source of revenue to the restaurant When Vietnam is more open to global market and the tourist market became more competitive with many new restaurants entering to the market, the restaurant expanded their clientele to local segment and started to open in few other locations for a number of years After that, in 2013, they decided to centralize the business, thus, focus on one location in district 10 with the capacity of more than 2,000 guests They operated with 170 employees At that time, they started to focus their strategy more on local market by offering weekend deals, buffets and especially functions such as meetings, business conferences, birthday party, year-end party and garden wedding party Because of the location and the food, they were able to reach the annual revenue of 35 billion Vietnam dong during that time However, in beginning of 2016, the rent was not available for them anymore They had to relocate and have been operating in different locations with capacity of approximately 200 guests each since then They created brands to serve different segments One is to serve mid-class segment with food and beer, which they have already built over years The other is to serve mid-high class, providing food-and-wine type and higher quality of service Both restaurants are still in growth stages, building its awareness and clientele bases in the areas Products, service and market Chateau restaurant serves main types of cuisines One is Vietnamese traditional dishes They are combined in several set menus for Tourists The dishes are presented in creative ways using fruit and vegetable carvings to capture interests of tourists The other cuisine that Chateau restaurant offers is French Fusion The owner of the restaurant picked up some -7- culinary art from a popular restaurant from the 60s and added few twists to the original taste to adapt to the local market This fusion style is welcomed by the local who appreciate different taste in the food & beverage market Competition in restaurant business, especially in Ho Chi Minh city, is rather intense in recent years As tourist is the most attractive market, the number of new restaurants has been increased rapidly since the past few years to accommodate the increasing demands such as Quan Bui, Quan Ngon, Royal Saigon Restaurant, Cuc Gach Quan, Hoang Yen, KOTO, Viet Pho, Thuyen Buom, etc They mainly compete by price and commission for the tour operators and tour guides It is the key to bring the business to the restaurant Same as in the restaurant business, tourism sectors have also increased a lot with number of agencies and operators Most of them are also competing by price, thus, offer low quality of service Seeing the gaps, some of them start to stand out, focusing and providing better quality service, creating greater value rather than keeping lowering price That is also why Chateau Restaurant changed their strategy since to capture this upper market Current management context and competitive position SWOT Analysis Strength Weakness ● Chateau restaurant was established in ● Even though, there are different areas 1989 as a Tourist dining destination suitable with many functions, it could Because of long history in serving only host small functions with limited tourists, it knows well the needs of number of diners tourists and has built good trusts among the tour companies ● The restaurant has not yet been able to attract high skilled labors, who have ● Restaurant located in an French villa more interest in international hotel environment divided in different areas chains It affects directly to the quality which can be utilized for private of service and food functions or groups of guests with different needs -8- ● It has old-French fusion taste in its ● Employee turnover is also a problem cuisine, which set its flavor unique More than half number of employees compared to its competitors It’s easy to only has short term commitment target to those Vietnamese who would like to explore new cuisine but not yet willing to experience the original taste ● There is lack of standard operational procedures for every task It causes problems when there are new recruits ● The Vietnamese dishes are decorated by and to maintain the quality using natural ingredients such as coconut, banana leaves, pineapple, etc ● Even though it has been established for which are attractive to Tourists nearly 30 years, its financial resource is still weak It was due to no financial ● Restaurant has good pricelist and plan The restaurant still uses 90% debt flexibility in payment from its suppliers to open the new premise in December because of long good relationship with 2016 them ● There is no clear marketing/ branding strategy for restaurant There is no ● The price is rather reasonable compared brand awareness in Vietnamese-guest to the competitors (10% - 15% lower) market ● Restaurant is located in District 3, 15 minutes away from Tan Son Nhat ● Current facility is rather small, could not capture big volume of tourists in Airport and 15 minutes to city center It’s the high season convenient for both airport and city center guests ● The business depends heavily on seasons – Wedding season, Tourist season, and end year/ new year season ● The only sale channel is through long relationship and contracts with tour companies ● There is no guest loyalty program in place Opportunity Threat ● Number of tourists arriving Vietnam ● Tourist market is tight with budget and keeps increasing compared to same highly sensitive with price period in past years (Vietnam National -30- 1.6 Learning and development Knowledge is the key building the competence of the business It plays the most crucial role in gaining the competitive advantages in this present V.U.C.A business world which is volatile, uncertain, complex and ambiguous It reflects on how fast the business could react on fast changes of the market The winner of the battle is the one who is the most responsive to the market change And knowledge is the access to it Business capacity does not rely only on the skills and knowledge of the employees but also on how the organization uses the current tacit knowledge of their employees to transfer it to explicit knowledge of the business, where it can be shared and captured in the business Business capacity can also be grown by knowledge creation and management process Understanding the context Creating knowledge Making decisions Understanding the context is the first step in knowledge management It is to understand the situation and the environment from multiple perspectives where business is in It should have engagement from all levels to create mutual understanding Variety of tools which can be used are SWOT, PESTEL, PORTER’S FIVE FORCES or PORTER’S FOUR CORNER MODEL This will start to help everyone have good understanding on what is feasible to and what is not, what might happen and what might not, what could be the threats, what could be the opportunity Starting to have these knowledge in mind, it starts to form some sort of knowledge in the employee’s mind Mission, vision and direction of the business should be clearly defined, explained to employees It will also help direct their focus and prepared them for knowledge creation At Chateau restaurant, because of the hierarchy management style, most of the knowledge is created mostly by operation manager and it is very limited They should create an environment where employees could participate and together create new knowledge, thus, increase the capacity of the business -31- SECI model is a such good tool to use to create such environment It is:  to circulate tacit knowledge from one to another employee  to transfer tacit knowledge from individual to capture it in the business  to combine and organize explicit knowledge that are created  to transfer the business explicit knowledge to individual tacit knowledge that employee can use for their job SECI Model First, key intelligence topics should be developed and explained clearly throughout the departments It will help guide and direct conversations Socialization is the setting where the employees could freely express their idea and opinions in either an informal meeting or just in any comfortable and friendly environment Employees should have enough time and free from daily duty in order to have sufficient socialization At Chateau restaurant, in the afternoon on weekdays, after the lunch service, it is normally a low business period It is the best time for the practice There are variety of formats that can be used such as brainstorming sessions or even tea break chats This process is the preparation of the further knowledge creation process If socialization is to circulate and share the personal knowledge with each other, the externalization is to gather, capture those personal knowledge, put and record it together as explicit knowledge in the business The topic which has been socialized might be introduced -32- again in a different setting Participants will be gathered in a so-called “Lesson learn workshop”, where the idea is evaluated and recorded This is where the knowledge is created Nowadays, with the improvement of the information technology, the knowledge can be created not necessarily from face to face interaction but also through online platforms or online community of practice such as Google Plus or LinkedIn The key intelligence topic is posted in the online group where anyone invited in the group can give inputs and discuss the matter in their convenient time This is a good method to capture all the knowledge created in business This is also the place where personal experience and skills on particular tasks is captured in a written record format, then, shared within the organization Combination is the process where data and information of the organization is gathered together in different forms of report And from the data, it will be transferred to knowledge by using variety of measurement and analysis tools It is where the knowledge of business current performance is found It is to help create further knowledge, thus, improve decision making process It is either to revise the strategy, plans, objectives, the methods or even direction and vision of the business It is such a powerful tool to make better decisions At this stage, advance intelligent technology could bring big advantages in term of efficiency and effectiveness Internalization is when the explicit knowledge of the business is transferred to personal tacit knowledge which employees can use in their daily jobs It can be done in many forms such as written step-by-step standard operational procedures, operational manuals and standard recipes Besides, training cannot afford to be the missing tool in this process of knowledge transferring In order to have effective training, Chateau restaurant should apply different stages of trainings in the organization: -33- TRAINING FOCUS STAGES Orientation  Train new recruits on the WHO IN CHARGE HR officers TYPE Workshop regulation, policy, expected working standards and environment, organizational Department Supervisor structure, culture  Train necessary skills and knowledge to perform quality jobs Job shadowing  Allow the new recruits to observe the work and ask questions to Department On-site Supervisor observation Skilled captains On the job learn the best practices in the restaurant Mentoring  Assign a new recruit with a training skilled captain to learn by using the skills learned orientation training and shadowing, trying and performing tasks under close supervision Buddy system  Assign the new recruit with more on-hand experience with senior employees working in the same position to learn more experience and receive necessary supports Senior Experience employees sharing -34- Job rotation  Employee is rotated to different job to learn new skills and Department On the job Captain training Department Workshops knowledge from other positions Specific trainings  Train special skills and manager knowledge that are required to Seminars perform particular responsibility that they have not done before This training is mainly used to Outside training provider acquire new set of skills and knowledge after employee gets promoted Table 11 - Training programs These training stages will enhance the employee’s capacity and knowledge, thus, help them provide quality performance to the business Training should be continuous in organization in order to improve the capacity After passing all the training stages, Chateau restaurant should continue to encourage their employees acquire more skills by themselves It could be done by working with them on their personal improvement plan This personal improvement plan is customized based on strengths and weaknesses of the individuals The outcome of the effective learning is the continuous improvement of the employee NO MEASUREMENT REPORT TARGET Quarterly individual improvement dashboard 90% % individual improvement plan is completed by each staff % new employees to the jobs are trained and evaluated, following the training package of that particular job Training report 100% # Skill gap analysis is performed per year Skill gap report Table 12 - Learning and Developing Measurement -35- Decision making At the top management level, learning is also a continuous process The knowledge is created every time a decision is made, a plan is executed, and the strategy is evaluated AFS Loop Story model The learning process starts with the goals and vision that the top managers want to achieve in the business These will be reflected in the strategy and plans that they put together with employees’ participation and inputs Then, the whole business will execute the common plans During the execution, there are metrics, measurement set up to track on the progress of the process Sometimes, defects are found Correction action is put in place That is the time where some knowledge is captured and created for the business In some of the time, the knowledge is created and captured right at the end of the process, where the hypothesis and assumption is tested It is either capturing the good practices that have been learned through the execution process or learning new experience through failure In the restaurant business, it relies heavily on the personal expectation Trial and error is always the efficient method to understand the market It will help managers build better direction and vision for the restaurant -36- 1.7 Succession planning Succession planning is the process that help motivate the employees It provides a direction and a pathway to employees on where and how they could grow and develop their career at the organization It helps keep employees on track of their capacity development, thus, increases the organization capacity NO MEASURE REPORT TARGET % career development plan is developed and explained to every employee Individual development dashboard 90% # maximum number of years that that an employee stays in the same position Individual development dashboard 2.5 years % high skilled employee retention Succession plan report 90% Table 13 - Succession Planning measurement It is the responsibility of the managers to help employees to grow, to acquire new set of skills and finally move up the next level of their career The result of this process will provide employees the feeling of attachment and belonging, through which the high skilled employees or talents will be retained in the business -37- Feasibility matrix Feasibility matrix is used to prioritize actions that can be taken to improve the capacity building in Chateau restaurant The matrix focuses on aspects: “Implementation time” is the length of time that Chateau restaurant needs to perform the improvement action (1) indicates the most time that needs to spend and (5) is the least time that is needed for the business to perform the improvement action “Impact” indicates the magnitude of the impact that the improvement action would bring to the business (1) is the least impact and (5) is the greatest impact “Feasibility” indicates, within the time as well as current resources, the possibility that Chateau restaurant could carry on at this moment of time (1) is lowest possibility and (5) is the highest possibility IMPROVEMENT IMPLEMENTATION ACTION TIME IMPACT FEASIBILITY WEIGHT Carry out job analysis 5 125 Develop candidate pool 5 75 Recruitment screening and interviewing procedure 4 64 Create orientation program 5 100 Create rewarding & recognition system 45 Create performance appraisal system 60 Create disciplinary process 4 64 -38- Create training programs 5 100 Create knowledge sharing environment 60 Create succession planning process 60 Table 14 - Feasibility Matrix From the feasibility matrix, Chateau restaurant could start some improvement action first and develop others in other time when they have more resources to The priority list is as below: Carry out job analysis Create orientation program Create training programs Develop candidate pool Recruitment screening and interviewing procedure Create disciplinary process Create performance appraisal system Create succession planning process Create knowledge sharing environment 10 Create rewarding & recognition system -39- Conduct change Implementing changes in the long history business needs time, commitment and efforts of every employees, especially frontline staffs Managing well the changes will help bring positive impact to the organization It is the responsibility of the top managers to make the changes possible Establish a sense of urgency Create the guiding Coalition Develop vision & strategy Empower broad-based action Generate short-term wins Consolidate gains & make more changes Anchor new approaches in the culture John Kotter’s steps to successful change Chateau restaurant could follow the model of John Kotter to implement and manage the change in their business Firstly, the top manager will take initiatives and leads to create the urgency of capacity building The employees, especially, key employees need to understand clearly the current situation of the business and how the capacity building could help improve the situation, thus, affect directly them Then, Chateau restaurant should form alliance from whom they could receive supports They could start from that group and spread the influence to other employees Top managers also need to develop a clear realistic and reachable visions and/ or missions of what capacity building is about and what they want to -40- achieve These visions and missions will then be brought to employees where they could all together come up with idea and plans to improve the business capacity With the plans and strategies made, employees will have more commitments and take more initiatives to execute it During the execution, metrics and indicators should be developed to measure the progress The managers could motivate employees by acknowledging some of the achievements that they have along the journey When more changes that are made, habits are formed and employees are comfortable with the new changes, it is the time to consolidate the new approaches and turn it to a part of the business culture And it will stay in the business -41- Chapter 2: Expected performance improvement Improvement in # of guests Increase in profitability Business value Increase in Business Improvement in guest satisfaction Increase branding Higher Quality of service Attract talents Improvement in Guest loyalty IMPROVEMENT IN EMPLOYEE CAPACITY Knowledge of company Improvement in revenue Increase in employee investment Improvement in employee capacity definitely takes time, effort and financial resources but it could create a reaction chain of impact in the business Four main positive impacts that could be created from the successful improvement of employee capacity are: Higher quality of service: Every employee is skilled with high performance competency The good practices are shared and learned among employees Innovation and new knowledge is created in the organization Improvement in guest satisfaction: guests are served by service quality providers They are learned and trained to enhance the guest’s experience Improvement in business value: the quality service improves the branding of the business The knowledge which is created is also added to the value of the business Improvement in financial performance: new guests are attracted, and loyal guests are created because of the quality service and experience that they received Increase in number of guests help bring the revenue and improve profitability of the business -42- Besides, it is also expected to see the improvement in the staff turnover Employees feel the belonging and trust the restaurant to be the place that they could grow and develop their career Capacity building also provides confidence to employees in their daily job Conclusion Chateau is a long-established-history restaurant with lots of potential and competitive advantages However, it is not a growing business in term of resources and capacity It has and still is relying heavily on the current capacity and advantages that it has had from more than twenty years ago In the meanwhile, the market becomes more volatile, complex, ambiguous and fierce There are more competitors coming to the market with innovative concepts, much better capacity and resources in term of both financial investment, employee skills and knowledge And this is what causes restaurant to lose regularly its position as well as its advantages Capacity building by improving employee capacity in a knowledge creating environment will be the key and solution that Chateau restaurant needs in order to create back its advantages Employees nowadays skilful and knowledgeable, thanks to the improvement in education, trainings and as well as knowledge has the world created and shared This is the dispensation of focusing on investing and utilizing their capacity This is the time to extract that source of tacit knowledge from individuals to capture and transfer it into explicit knowledge and use it to create the greater values and advantages for the organization This paper has been providing on action plans that Chateau restaurant could apply to implement the performance management system as well as to create a knowledge creating organization By focusing on building capacity through its employees, it is believed that Chateau Restaurant could improve overall quality of the business and gain back its competitive position in the current volatile market -43- Reference AFS (2018), A loop story, Available from www.afs.org/blog/icl/?p=2653 [Accessed on 04 February, 2018] Kotter, John P (1996), Leading Change, 1st edition, Harvard Business Review Press, United States of America Whatishumanresource.com (2018), Job analysis, Available www.whatishumanresource.com/job-analysis [Accessed on 23 January, 2018] from -44- Appendix A – Job analysis template Date Prepared by Department Title Job title Job level Reports to Experience needed Job context Duties/ Responsibilities Tasks Measurement Knowledge requirements Skills requirements Report KPI ... capacity and knowledge, thus, help them provide quality performance to the business Training should be continuous in organization in order to improve the capacity After passing all the training... Expected performance improvement Improvement in # of guests Increase in profitability Business value Increase in Business Improvement in guest satisfaction Increase branding Higher Quality of service. .. talents Improvement in Guest loyalty IMPROVEMENT IN EMPLOYEE CAPACITY Knowledge of company Improvement in revenue Increase in employee investment Improvement in employee capacity definitely takes