Boosting Restaurant Success with Incentive Compensation Programs

Many restaurant owners have discovered that incentive compensation programs are a smart way to keep employees motivated and committed to running efficient, profitable operations. These programs don’t replace regular pay but are used to additionally reward employees and encourage strong performance.

Bonuses for Management

For salaried managers like executives and district managers, bonuses are often tied to sales growth and overall profitability. Unit managers, those who run individual restaurants, typically earn bonuses based on objectives such as keeping food and labor costs down, maintaining cleanliness, having a positive attitude, and helping train employees.

To work well, these plans should be simple and realistic. Goals should match the restaurant’s budget and targets. It’s also important to clearly define which managers are eligible and to set a cap on the bonuses. This helps avoid the risk of cutting corners on service or quality just to hit bonus goals.

Bonuses for Hourly Employees

Hourly, or non-exempt, employees can receive cash bonuses for every hour they worked in the past quarter. This kind of incentive often helps bring in new workers and keeps current staff from leaving. However, it’s important for restaurant owners to include these bonuses when calculating minimum wage and overtime pay, as required by federal law.

Deferred Compensation

This option lets restaurants promise to pay part of an employee’s salary later on- often after a few years. It’s a great tool to encourage long-term commitment from key employees.

Incentive compensation programs, when planned well, can be a win-win for both restaurant owners and employees, leading to better performance, stronger teams, and higher profits.