Senior management at LongHorn Steakhouse has found a creative way to shore up earnings in a sluggish economy. In an effort to hold down labor costs, the restaurant chain has increased the percentage of tips that waiters and waitresses must share with their fellow employees. Until recently, LongHorn requited wait-staff workers to "tip out" 1 percent of their total sales each shift to hosts and bartenders. Hoping to offset the effects of higher food costs and an anticipated minimum wage increase, LongHorn now makes servers give back 2.25 percent of total sales.

LongHorn's parent company, Darden Restaurants Inc., credited the new policy for helping reduce the company's labor expenses by 0.6 percent last quarter. Most state laws allow restaurants to pay tipped employees less than minimum wage as long as their combined earnings and tips total at least minimum wage. LongHorn is forcing servers to contribute a larger share of their tips to hosts and bartenders so the company can decrease its portion. Darden, which also owns the Olive Garden and Red Lobster chains, is considering similar changes in all its restaurants.

Compare LongHorn's actions to those of Boston's Mercantile Bank. The three-branch community bank has increased its labor costs in order to help employees deal with rising gasoline prices. Depending on the length of their daily commute, workers receive as much as $50 each week to defray escalating fuel costs.

Things, as the saying goes, are tough all over. When the economic correction ends and the recovery begins, employees will remember how their leaders responded.

Labels: employees, leadership

Bookmark this post on del.icio.us

If you work for a large company, this situation probably sounds familiar to you: Senior management, concerned about worker disgruntlement and high turnover, commissions an employee survey. Then, after spending tens of thousands of dollars soliciting and compiling staff members' opinions and suggestions, management fails to act on the feedback. Employees are left wondering if management values their concerns and ideas, or if the higher-ups were just pretending to care.

Whether it's a deliberate charade or simple negligence, the practice is widespread. According to Opinion Research Corporation's latest annual employee research study, 46 percent of companies that conduct workforce surveys do not address the issues that their employees raise. The leaders of those companies are wasting more than the money spent conducting the surveys; they are squandering their credibility as well.

I think many leaders pay for employee surveys hoping for positive news. "Hey, it turns out our workers like us despite the recent round of benefit rollbacks." For that reason, rather than heeding employee warnings that the ship is sinking, management takes solace in knowing that the doomed appreciate hearing the orchestra playing as the vessel descends. Those companies are missing out on opportunities to engage their workers. According to the ORC's analysis, 84 percent of employees working for companies at which management acts on the information gathered in worker surveys feel positively affected by the resulting changes.

Employee surveys can provide vital information for organizations. Leaders need feedback from workers closest to the frontline, who often bring forth new ideas or warnings about overlooked problems. But management has to be willing to listen to the good and the bad, and act on both. Bookmark this post on del.icio.us