FAMILY STEAK HOUSE (B) WARLEY'S FAMI Pearson, manager of Charley's One of his cooks had ius ess I'll just have to find out if I can still cook like I used to," thought Alex ager of Charley's Family Steak House No.2, as he hung up the telephone. his cooks had just called in sick, one was in the hospital, and the other two were ation. He wasn't too concerned, however, because the first two weeks in January here typically not very busy. Many of his steady customers made annual New Year's resolutions about losing weight, and it usually took at least a week for them to resume their former eating habits. Alex's only real concern that morning was how Charley Turner, the owner of the steak house, would assess Alex's performance now that he had completed his first full year as manager. Unit No. 2 was one of four Charley's Family Steak Houses owned by Mr. Turner. Alex had been promoted from assistant manager to manager of the restaurant in September 2007 after the previous manager was caught falsifying the weekly financial reports that were submitted to Mr. Turner. Alex had previously worked as a cook at Unit No. 1 and as assistant manager of Unit No. 4. He was moved to Unit No. 2 in June 2007 because Charley Turner had serious concerns about the manner in which that restaurant was being managed Unlike the other three restaurants, Unit No. 2 was located next to a small shopping center and close to a large office complex. In July 2008, a 100-room economy motel with a pool but no restaurant opened within easy walking distance of the steak house. Except for a sandwich shop and pizza place located in the shopping center, there were no other eating establishments within about one mile of Unit No. 2. Charley Turner considered it to be an excellent location. In September 2008, Alex developed an express service innovation at Unit No. 2 for frequent lunchtime customers who didn't have much time to eat. It consisted of a "quick-serve" menu (see Exhibit 1), prepaid meal cards, and a separate ordering and payment line. This innovative service became very popular with people who worked in nearby office buildings, and it enabled the restaurant to establish a brisk lunchtime business throughout the workweek. Soon after his promotion to manager, Alex had met with Mr. Turner to develop the 2008 operating plan for Unit No. 2. Although the plan was not unreasonable, Alex viewed the sales projections as being very aggressive. Nevertheless, he was delighted with his new position and the opportunities it would provide. He felt confident he would find a way to meet the high expectations Mr. Turner had for Unit No. 2 and for Alex as its manager. Besides, Mr. Turner had informed him that he was considering menting a bonus system that would make Alex eligible to earn up to an additional 50% of his salary. Alex believed the most important performance measure of the bonus CASE: CHARLEY'S FAMILY STEAK HOUSE (B) 119 Exhibit 1 EY'S FAMILY STEAK HOUSE (B) CHARLEY'S FAM Menu for Unit No. 2 zoals never ed to that bent ask Top of the Line Lobster Dinner New York Strip Jumbo Shrimp Prime Rib $16.99 11.99 10.99 9.99 lex act Popular Sirloin BBQ Ribs Seafood Platter Sirloin Tips Chicken Breast Rib Eye 8.99 8.99 8.99 8.79 8.29 8.19 Value Chopped Sirloin Country Fried Steak Baked Fish Fried Shrimp Ham Steak 6.99 6.79 6.79 5.99 5.79 3.99 3.79 Sandwiches and Salad Bar Chopped Steak Fish Fillet Beef BBQ Barbeque Chicken Jumbo Hot Dog Salad Bar Buffet Side Salad 3.79 3.59 2.99 5.99 1.99 Quick-serve menu item E:CHARLEY'S FAS T'S FAMILY STEAK HOUSE (B) 121 Exhibit 4 CHARLEY'S FAMILY STEAK HOUSE (B) Schedule of Staff Hours and Wages 2008 Actual 2008 Plan Cooks Hours worked Average wages per hour 8,000 $12.50 8,000 $13.00 Cashiers and Servers Hours worked Average wages per hour 26,400 $3.25 32,032 $3.00 FAMILY STEAK HOUSE (B) WARLEY'S FAMI Pearson, manager of Charley's One of his cooks had ius ess I'll just have to find out if I can still cook like I used to," thought Alex ager of Charley's Family Steak House No.2, as he hung up the telephone. his cooks had just called in sick, one was in the hospital, and the other two were ation. He wasn't too concerned, however, because the first two weeks in January here typically not very busy. Many of his steady customers made annual New Year's resolutions about losing weight, and it usually took at least a week for them to resume their former eating habits. Alex's only real concern that morning was how Charley Turner, the owner of the steak house, would assess Alex's performance now that he had completed his first full year as manager. Unit No. 2 was one of four Charley's Family Steak Houses owned by Mr. Turner. Alex had been promoted from assistant manager to manager of the restaurant in September 2007 after the previous manager was caught falsifying the weekly financial reports that were submitted to Mr. Turner. Alex had previously worked as a cook at Unit No. 1 and as assistant manager of Unit No. 4. He was moved to Unit No. 2 in June 2007 because Charley Turner had serious concerns about the manner in which that restaurant was being managed Unlike the other three restaurants, Unit No. 2 was located next to a small shopping center and close to a large office complex. In July 2008, a 100-room economy motel with a pool but no restaurant opened within easy walking distance of the steak house. Except for a sandwich shop and pizza place located in the shopping center, there were no other eating establishments within about one mile of Unit No. 2. Charley Turner considered it to be an excellent location. In September 2008, Alex developed an express service innovation at Unit No. 2 for frequent lunchtime customers who didn't have much time to eat. It consisted of a "quick-serve" menu (see Exhibit 1), prepaid meal cards, and a separate ordering and payment line. This innovative service became very popular with people who worked in nearby office buildings, and it enabled the restaurant to establish a brisk lunchtime business throughout the workweek. Soon after his promotion to manager, Alex had met with Mr. Turner to develop the 2008 operating plan for Unit No. 2. Although the plan was not unreasonable, Alex viewed the sales projections as being very aggressive. Nevertheless, he was delighted with his new position and the opportunities it would provide. He felt confident he would find a way to meet the high expectations Mr. Turner had for Unit No. 2 and for Alex as its manager. Besides, Mr. Turner had informed him that he was considering menting a bonus system that would make Alex eligible to earn up to an additional 50% of his salary. Alex believed the most important performance measure of the bonus CASE: CHARLEY'S FAMILY STEAK HOUSE (B) 119 Exhibit 1 EY'S FAMILY STEAK HOUSE (B) CHARLEY'S FAM Menu for Unit No. 2 zoals never ed to that bent ask Top of the Line Lobster Dinner New York Strip Jumbo Shrimp Prime Rib $16.99 11.99 10.99 9.99 lex act Popular Sirloin BBQ Ribs Seafood Platter Sirloin Tips Chicken Breast Rib Eye 8.99 8.99 8.99 8.79 8.29 8.19 Value Chopped Sirloin Country Fried Steak Baked Fish Fried Shrimp Ham Steak 6.99 6.79 6.79 5.99 5.79 3.99 3.79 Sandwiches and Salad Bar Chopped Steak Fish Fillet Beef BBQ Barbeque Chicken Jumbo Hot Dog Salad Bar Buffet Side Salad 3.79 3.59 2.99 5.99 1.99 Quick-serve menu item E:CHARLEY'S FAS T'S FAMILY STEAK HOUSE (B) 121 Exhibit 4 CHARLEY'S FAMILY STEAK HOUSE (B) Schedule of Staff Hours and Wages 2008 Actual 2008 Plan Cooks Hours worked Average wages per hour 8,000 $12.50 8,000 $13.00 Cashiers and Servers Hours worked Average wages per hour 26,400 $3.25 32,032 $3.00