Leadership Case Study

Leadership Case Study

Justin Salisbury Tries a Little Recognition Justin Salisbury is a super-franchiser for a large chain of soup-and-sandwich shops. He owns twelve shopsin the same region, having invested $2 million to ownthese stores. One-half the investment in the storescame from inheritance and investments Justin hadmade prior to becoming a franchisor. The other half of the money was borrowed, so Justin feels consider- able pressure to earn enough gross profit from the stores to make his debt payments and earn a living. Justin concluded that he needed to increase rev- enues from his stores about 15 percent in order to net enough profit for a comfortable living. He believed that his business processes were good enough to make a profit, and that the company was giving his franchise operations enough marketing and advertis-ing support. Justin also thought that his managers were running efficient operations. He was concerned, however, that they weren’t trying hard enough to achieve good customer service by encouraging the or- der takers at the stores to pay more attention to cus- tomers. For example, when Justin visited the stores (or sent a family member in his place), the order takers didn’t smile enough or ask frequently enough, “What else would you like with your order?”

Justin decided that he shouldn’t micromanage by telling the store managers how to motivate their staffs. Yet he decided to discuss with his managers what he wanted—more profit by doing a better job of motivat- ing the order takers and ???cashiers. He also pointed outto his twelve store managers that he would be reward-ing and recognizing their accomplishments in boostingstore revenues. After consulting with the managers,Justin established the goal of a 15 percent increases inrevenues within twelve months. Two weeks after the goal-setting discussions with the twelve store managers, Justin announced that he would be recognizing and rewarding attaining a 15 percent or better increase in revenue with two of the following forms of recognition: A wall plaque designating the manager as a “Store Manager of the Year” A year’s membership in an athletic club for the manager and a spouse or partnerA bonus equivalent to 2 percent of annual salaryAn iPodAn expense-paid trip for the manager and his or her family to one day at an amusement park or theme park. Justin waited for responses from his managers to the proposed recognition plan. He received several email messages acknowledging an appreciation of his program, yet no burst of enthusiasm. Justin thought to himself, “I guess the managers don’t understand yet how great it feels to be recognized for making a tough financial target. I think that when they earn their recognition awards, I will see a lot more enthusiasm.”
Questions:
1. What advice can you give Justin Salisbury about the most likely motivational consequences of his recognition program?
2. What other form of recognition should Justin offer the store managers?
3. Would it be better for Justin to have a recogni- tion program aimed directly at the order takers and cashiers than at their managers? Explain your reasoning.
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