Sample Letter of Intent
SHA508: Foodservice Management: Control Systems and Related Systems School of Hotel Administration, Cornell University
Evaluating the Performance of Your Control System Managers rely on daily, weekly, and monthly reports to gauge performance. While the reports may indicate the existence of a problem, they will not pinpoint the problem itself. Spot checking the system is a necessity. Random audits, showing up unexpectedly, and conducting surveys, all help monitor and improve the control system. There are four basic techniques used to evaluate the control system. In smaller operations, the manager may be performing the control functions as well as evaluating their effectiveness. Accounting and Financial Analysis
Reviewing budgets, labor schedules, sales forecasts, P&L statements, and operating ratios are all ways of monitoring the effectiveness of the operation and the overall control system. If forecasted and actual results are in line, and customer satisfaction remains high, then the systems and controls are functioning properly. If there is a significant discrepancy, it could mean that the control system did not pick up the problem soon enough for the manager to make the necessary adjustments. For example, if food cost for your fine-dining restaurant was budgeted at 35%, but the actual cost came in at 30%, this might look good at first. The reality may be that the guests were served lower quality product or smaller portions, which may well have diminished the perceived value of the experience. The lowered standards should have been picked up by the control system long before the monthly statement came out. Internal Audits
The control system manager should conduct the following types of internal reviews or audits on a random basis: •
Invoice audits to recheck the product that was received and accepted by the receiving clerk
•
Guest check audits to make sure servers and bartenders are correctly recording everything served
•
Random cash-drawer audits to check on cashiers and bartenders
•
Inventory audits to verify the accuracy of information previously recorded
•
Service audits to monitor service level and service standards
All of these audit-like activities reinforce the standard operating procedures that employees should be following. Management should review the numbers and the results of these activities when evaluating the effectiveness of the control system. Observation
The control system manager should be physically present throughout the operation and periodically observe the work of employees in different departments to monitor effectiveness and efficiency. Spotters and silent shoppers can also be employed by the control system to observe and report on employee performance and activity levels. Examining the number of reports generated and the actions taken on them is another way to judge the effectiveness of the control system. Survey Method
The control system manager can conduct surveys of guest satisfaction and employee satisfaction, and conduct exit interviews to monitor qualitative issues. These surveys are actually a control to © 2015 eCornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners.
SHA508: Foodservice Management: Control Systems and Related Systems School of Hotel Administration, Cornell University monitor the effectiveness of both the overall operation and specific systems such as production, service, and human resources. While surveys like these may be more qualitative in nature than an accounting ratio, they can provide essential information for the manager to redirect systems.
Evaluating the Performance of Your Control System, page 2 © 2015 eCornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners.
Evaluating the Performance of Your Control System Managers rely on daily, weekly, and monthly reports to gauge performance. While the reports may indicate the existence of a problem, they will not pinpoint the problem itself. Spot checking the system is a necessity. Random audits, showing up unexpectedly, and conducting surveys, all help monitor and improve the control system. There are four basic techniques used to evaluate the control system. In smaller operations, the manager may be performing the control functions as well as evaluating their effectiveness. Accounting and Financial Analysis
Reviewing budgets, labor schedules, sales forecasts, P&L statements, and operating ratios are all ways of monitoring the effectiveness of the operation and the overall control system. If forecasted and actual results are in line, and customer satisfaction remains high, then the systems and controls are functioning properly. If there is a significant discrepancy, it could mean that the control system did not pick up the problem soon enough for the manager to make the necessary adjustments. For example, if food cost for your fine-dining restaurant was budgeted at 35%, but the actual cost came in at 30%, this might look good at first. The reality may be that the guests were served lower quality product or smaller portions, which may well have diminished the perceived value of the experience. The lowered standards should have been picked up by the control system long before the monthly statement came out. Internal Audits
The control system manager should conduct the following types of internal reviews or audits on a random basis: •
Invoice audits to recheck the product that was received and accepted by the receiving clerk
•
Guest check audits to make sure servers and bartenders are correctly recording everything served
•
Random cash-drawer audits to check on cashiers and bartenders
•
Inventory audits to verify the accuracy of information previously recorded
•
Service audits to monitor service level and service standards
All of these audit-like activities reinforce the standard operating procedures that employees should be following. Management should review the numbers and the results of these activities when evaluating the effectiveness of the control system. Observation
The control system manager should be physically present throughout the operation and periodically observe the work of employees in different departments to monitor effectiveness and efficiency. Spotters and silent shoppers can also be employed by the control system to observe and report on employee performance and activity levels. Examining the number of reports generated and the actions taken on them is another way to judge the effectiveness of the control system. Survey Method
The control system manager can conduct surveys of guest satisfaction and employee satisfaction, and conduct exit interviews to monitor qualitative issues. These surveys are actually a control to © 2015 eCornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners.
SHA508: Foodservice Management: Control Systems and Related Systems School of Hotel Administration, Cornell University monitor the effectiveness of both the overall operation and specific systems such as production, service, and human resources. While surveys like these may be more qualitative in nature than an accounting ratio, they can provide essential information for the manager to redirect systems.
Evaluating the Performance of Your Control System, page 2 © 2015 eCornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners.
