HRM at The Cheesecake Factory Research Paper

Introduction

The Cheesecake Factory is a restaurant chain started in 1978 in the United States and focused on producing and distributing a variety of baked products, along with serving other dishes including salads and pizza. Having grown from a small Evelyn Overton’s home bakery, today the company has nearly 200 restaurants around the world, mainly in the US, UAE, and Lebanon, and is open for expansion in Mexico, China, Russia and Turkey (The Cheesecake Factory Official Website, 2016). Positioning itself as restaurant for the whole family, The Cheesecake Factory not only offers one of the broadest menus in casual dining segment, but also incorporates strong corporate governance standards in its policies to satisfy the varying needs of its customers. Thus, company’s mission is to create the environment where absolute guest satisfaction is the top priority. Overall, the company claims to operate with the highest principle and integrity, and be committed to excellence in all that they do (The Cheesecake Factory Official Website, 2016).

Indeed, as the result of implementing its corporate goals and vision effectively, The Cheesecake Factory turned to be the only restaurant company on 2016 Fortune’s Top 100 Employers list, and it is generally the third year in a row for the company in receiving this award (Hills, 2016). The company itself states that its success is largely based on experienced management and talented personnel. Aimed at retaining skilled employees, The Cheesecake Factory actively invests in its comprehensive leadership and career development programs, which led the company to being not only one of Fortune’s 100 Best Companies to Work For, but also one of the 50 Best Workplaces for Diversity, and Most Preferred Casual Dining Restaurant overall (The Cheesecake Factory Official Website, 2016). Further in this paper, we will focus on the particular strategies that helped the company succeed in the development, engagement and retention of its talents, as well as comment of the specificities of implementing them.

Cheesecake Factory’s HRM practices

In whole, The Cheesecake Factory is highly oriented at securing highest values, friendly environment and effective motivation in its personnel. Claiming that people are its treasure, the company is well-known for its training programs, managing diversity strategies, and outstanding employee benefits.

Thus, for instance, the company annually spends an average of $2,000 on training per an employee (Great Place to Work Institute, 2016). At The Cheesecake Factory, employees obtain individualized training courses directly related to their personal job responsibilities, be it kitchen, front desk or general management. The formalized training initiatives are performed through a variety of educational instruments, including interactive games and role-playing, coaching and on-the-job training (Ruiz, 2006). The learning process at The Cheesecake Factory is based on mentor system. The candidates are usually assigned to other experienced workers with similar responsibilities and thus are navigated through diverse situations occurring at the workplace. In addition, language barrier is eradicated by means of English as a second language programs (Ruiz, 2006). In the end, the training courses also turn to be quite extended in time. In particular, servers get at least two weeks of on-the-job guidance, while candidates for managerial position spend up to 12 weeks in leadership and development courses. In sum, The Cheesecake Factory provides full-time and hourly staff with 327 and 151 hours respectively of professionalgrowth and development training annually (Great Place to Work Institute, 2016; The Cheesecake Factory Official Website, 2016; Ruiz, 2006).

Believing that one of the most important elements of delivering a consistent level of service is building a team of experienced leaders who can execute under pressure, the company consciously moves to increasing tenure rating. Today, the operational leadership team mainly consists of managers whose careers span is over 10 years (Figure 1). The overall turnover rates are also about 15% below the industry average. The effectiveness of company’s workforce development programs also indirectly reflected in high guest satisfaction and stable loyalty rates, while the industry generally demonstrates 1-2% decrease in these indicators (Great Place to Work Institute, 2016; The Cheesecake Factory Official Website, 2016).

Figure 1. Tenure rates at The Cheesecake Factory.

Source: Great Place to Work Institute, 2016.

In this perspective, another important aspect is company’s focus of training servers, who make up to 40% of the total company’s workforce and are considered to be the face of The Cheesecake Factory (The Cheesecake Factory Careers, 2016). Dealing with over 200-category menus, they are put on the front line and are expected to be stress-free, fun and friendly, and thus go through an extensive training course. The certification process not only takes two weeks, but is also followed up by additional classes a month after certification, as well as regular retraining aimed at mastering menu changes. Servers also complete annual recertification, and each of the exams has to end up with receiving grade A. Otherwise, after two attempts to qualify, they are no longer allowed to be the part of The Cheesecake Factory (Ruiz, 2006). To sustain accurate quality control and consistent service, the company also aims at securing standardized training tools throughout its international departments.

Next, The Cheesecake Factory has its unique way in connecting with its employees and providing them with a wide range of benefits. In particular, restaurant management benefits include paid two-week annual vacation during the first four years of employment, and a three-week vacation starting from the fifth year. An employee can also choose to participate in a healthcare or dependent care Flexible Spending Accounts plan, or participate in Health Savings Account which includes company’s contribution in case of the select HDHP medical plan. Other benefits involve 401(k) Plan, Life and Accidental Death & Dismemberment (AD&D) Insurance, Long-Term Disability Insurance (LTD), Employee Assistance Program (EAP), and Wellness Program (The Cheesecake Factory Careers, 2016).

In its turn, restaurant hourly staff is guaranteed with earning paid time off and enrolling in company’s medical, dental, life insurance and voluntary benefit plans in case of working an average of 25 hours a week in order to maintain eligibility. The waiting time for a health insurance makes six months, but the company covered up to 65% of it. The company also offers 25% off all dine-in food, cakes and non-alcoholic beverages Sunday through Thursday. The discount is working for dining with family and friends, as well as receiving a cheesecake during the holidays. In addition, there are discounts on gym memberships, traveling, ticket sales, massage therapy, car wash, and dry cleaning and other services. Every employee at The Cheesecake Factory also gets acknowledgments for one birthday’s or anniversaries. Furthermore, trying to balance employees’ work and family time, the company takes advantage of flexible scheduling policies for earning a college degree and caring of a baby. Paid sabbaticals and lactation rooms are also a must (The Cheesecake Factory Careers, 2016).

Besides, the company demonstrates its generosity when it comes to recognition for job done well and broadening rewards. Here, incentives range from free meals and extended flexibility of schedules to all-expenses-paid trip for two and other really big monetary rewards costing up to $3,000 (Ruiz, 2006). Recognition and appreciation programs also include team shoutouts and notes of thanks, managerial letters and even gifts, up to prestigious annual awards such as “Restaurant of the Year” and “Commitment to Excellence” (Great Place to Work Institute, 2016). The names of the winners are openly announced during the daily meetings, which are also used as an effective tool to team up. Used as a platform for sharing ideas, they unite employees in the common mood, and the acceptance of the corporate culture plays a crucial role here. Team building is also presented by regular in-restaurant celebrations and parties, as well as out-restaurant corporate event like picnics and award nights (Great Place to Work Institute, 2016; Ruiz, 2006).

Overall, The Cheesecake Factory workers get an above-industry-average compensation and benefit package. For instance, according to the Great Place to Work Institute (2016), an average salary and additional cash compensation for makes about $44,000 a server and about $70,000 for a restaurant manager. Moreover, The Cheesecake Factory is actively using the tools of promotion. Thus, no less than 25% of restaurant managers are hired from internal talent pool, as a result some employee have up to 25 years of career span within the company, and the average turnover rate makes 105% (Great Place to Work Institute, 2016).

The company also makes the list of 50 Best Workplaces for Diversity (The Cheesecake Factory Official Website, 2016; Hills, 2016). Its policy consists in providing employment, training, compensation, benefits, and promotion regardless of sex, race, origin and citizenship, religion, orientation and gender identity, age, marital and familial status, medical condition or disability, or any other protected characteristic (Figure 2). The company claims to hire and develop qualified people basing its judgment on job-related criteria solely. Thus, for instance, the portion of men and women are practically equal in the company, and yet, the managerial staff is still mostly presented by male employees (Figure 3).

Figure 2. Workplace Diversity: Age, Minority rate, Job flexibility.

Source: Great Place to Work Institute, 2016.

Figure 3. Workplace Diversity: Gender in executive sector and overall.

Source: Great Place to Work Institute, 2016.

However, in whole, company’s recruitment policy is based on professional criteria, i.e. being efficient, hardworking and having appropriate mind-set, or “Cheesecake” fit. In this regards, the company believes that hiring right people is not just an instrument for guaranteeing a high level of performance, but also a method to reduce the turnover. Thus, potential employees are expected to be highly engaged, have rested smile, and demonstrate passion for what they do (Great Place to Work Institute, 2016). Although the selection process is as fierce as getting certified, it helps the company to secure quality in its operations.

Evaluating HRM practices

As Barrows and Vieira (2013) rightly mark, the number of layoffs and turnover increase, if people do not receive proper training or feel that the demands placed upon them do not allow them operate efficiently without additional training. New employees starting work without appropriate training may have “adaptive crisis”. That is why The Cheesecake Factory has developed and introduced its extensive training programs, which help the company to:

  • provide its workers with the necessary level of competence and confidence in achieving their expected standards of performance;
  • improve existing skills;
  • helping people to acquire new skills to enable them to better utilize their abilities, take more responsibility, solve a variety of tasks and earn more if the wage structure is based on skills and competence level;
  • enable new employees to speed up the process of acquiring and learning the basic skills and knowledge needed for a successful start of their employment;
  • improve the status of workers both in the internal and external labor markets.

In addition, dissatisfaction with career prospects is a major cause of employee turnover. The idea of “lifelong career” is not typical of a rapidly changing modern labor market, and the process of self-organization and expansion of the skills base leads to an increase in the number of qualified staff. However, the company realizes the value of retaining the key personnel, and therefore it makes sure to provide the opportunities for career development through:

  • creating conditions for employees to obtain a wider range of experience;
  • introducing systematic procedures to identify labor potential, such as assessments and development centers;
  • encouraging promotion from internal reserves;
  • development of procedures based on the equality principle; cross training;
  • providing guidance and professional advice on career development.

Another risk of losing employees is when they feel isolated and dissatisfied if they are not part of a cohesive team or that they are being used as a pawn in a political game (Park & Lee, 2009). The Cheesecake Factory prevents this problem through such teamwork methods as daily formal meetings and celebrations; creating self-regulating and autonomous work groups or project teams; emphasizing the value of teamwork as a basic value; rewarding people for effective work as members of teams, and development of teamwork skills. Promotion from within on a frequent basis also has a positive effect on the work ethics and can be considered an effective tool in reducing the turnover.

All together, these practices make the organization a competitive force in the industry, with its low turnover rate and over 10% of the new hires by employee referrals (Great Place to Work Institute, 2016). Indeed, the 2015 review based on 900 employee surveys, with a ±3.23 margin of error and a 95% confidence level shows that 90% of The Cheesecake Factory employees are highly satisfied with their workplace (Figure 4).

Figure 4. Employee Ratings at The Cheesecake Factory.

Source: Great Place to Work Institute, 2016.

Conclusion

The Cheesecake Factory is a rapidly developing international company with it unique approach to appreciating and retaining its personnel. Believing that knowledge and tenure are the drivers of high productivity and guest satisfaction, the company puts all of its efforts into the development and retention of talent through investing in leadership, professional growth, mentoring, cross-training and ongoing learning programs. In addition, company’s vast benefit program involves the opportunities to build the right balance between work and personal life, take care of health needs, and even plan retirement. Together with internal promotion strategies, this puts the company on the top of the competition in its market segment.

In general, the example of The Cheesecake Factory vividly demonstrates that material compensation is not the major factor of employee motivation. Utilizing a wide range of alternative reward systems, the company managed to reduce the turnover rate to minimum and increase employee loyalty to its maximum. This strategy-driven approach to human resource management not only secured the company its place in the top 100 Companies to Work For, but also help maintain its high performance rates, meet changes without pressure, and expand consistently.

References:

Barrows, C., & Vieira, E.T. (2013). Recommendations for the Development of a New operational classification System For The Foodservice Industry. Journal of Hospitality & Tourism Research, 37(3), 349-376.

Great Place to Work Institute. (2016). The Cheesecake Factory Incorporated Review. Online. Accessed from http://reviews.greatplacetowork.com/the-cheesecake-factory.

Hills, C. (2016, March 4). The Cheesecake Factory Named on Fortune’s “100 Best Companies to Work For” List for Third Consecutive Year. The New York Times Online. Accessed from http://markets.on.nytimes.com/research/stocks/news/press_release.asp?docTag=201603031658BIZWIRE_USPRX____BW6340&feedID=600&press_symbol=69639.

Park, S., & Lee, S. (2009). Financial Rewards for Social Responsibility: A Mixed Picture for Restaurant Companies. Cornell Hospitality Quarterly, 50(2), 168-179.

Ruiz, Gina. (2006, May, 3). Cheesecake Factory Cooks Up a Rigorous Employee Training Program. Workforce Online. Accessed from http://www.workforce.com/articles/cheesecake-factory-cooks-up-a-rigorous-employee-training-program.

The Cheesecake Factory Official Website. (2016). Corporate Overview. Online. Accessed from http://investors.thecheesecakefactory.com/phoenix.zhtml?c=109258&p=irol-homeprofile.

The Cheesecake Factory Careers. (2016). Management Benefits. Online. Accessed from http://ww3.cakecareers.com/management-benefits.

The terms offer and acceptance. (2016, May 17). Retrieved from

[Accessed: October 1, 2022]

"The terms offer and acceptance." freeessays.club, 17 May 2016.

[Accessed: October 1, 2022]

freeessays.club (2016) The terms offer and acceptance [Online].
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[Accessed: October 1, 2022]

"The terms offer and acceptance." freeessays.club, 17 May 2016

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"The terms offer and acceptance." freeessays.club, 17 May 2016

[Accessed: October 1, 2022]

"The terms offer and acceptance." freeessays.club, 17 May 2016

[Accessed: October 1, 2022]

"The terms offer and acceptance." freeessays.club, 17 May 2016

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