FAREAST INTERNATIONAL UNIVERSITY

COURSE TITLE: Compensation Management.

COURSE CODE: BUS 4133

SEMESTER: Spring 2022

SUBMITTED TO

COURSE TEACHER: MS. RAIHANA SADIA

ASSISTANT PROFESSOR

SUBMITTED BY

STUDENT NAME: MD NURULLAH SHOUVO

STUDENT ID: 18301011

DEPARTMET –BUSINESS ADMINISTRATION.

PROGRAM: BBA
Organizational Structure of a Restaurant

Restaurants have very specific staffing needs, and their organizational structure must be in line with
those needs to function well. The size of the restaurant usually determines the ultimate structure;
staffers often take on more than one role in smaller establishments, but restaurants typically have
the same basic framework, regardless of their size. The structure is designed to implement a system
of responsibility and accountability, with a clear chain of command.

Restaurant
owner

General
Manager

Assistant
Manager

Executive Front House Bar

Cocktail
Head Chef Server, Lead Server Host Bar Back
Waitress

Types of Ownership Structure

Independent restaurants commonly have either a single owner, an owner and several investors or a
small group of people who share ownership. Medium and large chain restaurants are normally
either structured as corporations or are owned outright by a larger parent company. There are five
different types of legal structures restaurants may follow: a limited liability company, known as an
LLC, sole proprietorship, partnership, S corporation or C Corporation.

Owners are responsible for the business finances, but often hire accountants to take care of the
books. They are also the ultimate decision makers and are accountable for the general direction of
the business. Although they do not need to be involved in the day-to-day operation of the
restaurant, owners of smaller independent establishments often take on an active role in the
restaurant’s operations.

Role of the General Manager

The general manager is responsible for the day-to-day operations of the business, including hiring,
training and overseeing the staff, making sure that the restaurant is maintained in proper operating
condition and ensuring that things run smoothly when the restaurant is open.

They also are responsible for totaling up the daily receipts, making sure that the restaurant adheres
to all legal requirements and communicating with the restaurant owner. In medium to large
establishments, general managers often have assistant managers to help them. However, the
owner or executive chef often plays the general manager’s role in smaller operations.

Front-of-House Staff

At the operations level, restaurant duties fall into one of two areas: front of house and back of
house. The front-of-house staff is responsible for the restaurant’s dining area, including setting up
service, waiting on customers and interacting with the kitchen staff. If the restaurant serves alcohol,
they are also responsible for the beverages and bar area.

Smaller establishments may have a single food and beverage manager who takes care of both
areas, but larger establishments, or those who serve a large amount of alcohol, typically split the
managerial duties between bar manager and food manager. Both of these positions report to the
restaurant’s general manager. Any banquet or catering operations also fall into this area of
responsibility.

Role of the Executive Chef

The executive or head chef is responsible for back-of-house operations. This includes hiring and
training kitchen staff, creating menu items, sourcing and purchasing foods and helping determine
the prices the restaurant should place on its meals. Depending on the size of the restaurant, he may
report to the food and beverage manager, the general manager or to the owner directly.

The food and beverage manager may also have an executive chef reporting to him who develops
the menus and oversees the kitchen. In upscale hotels where the gourmet restaurants are
considered an important amenity to the guests and attracts diners outside of hotel guests, the
executive chef may report directly to the general manager. The marketing manager has a director of
sales, a director of publicity, and possibly a director of advertising.

At the heart of any fast food restaurant is its sales team. As such, it is imperative to structure this
team in a way that makes it easy for employees to accomplish tasks and serve customers
productively. Keeping a coordinated and coherent team structure within a fast food restaurant will
also help to offset the industry’s notoriously high rate of turnover.

Front Counter Sales Team

A major portion of the sales team in any fast food restaurant is made up of the employees who
work at the front counter. Typically, counter associates stay on the front line while other associates
dedicate their entire jobs to cooking or custodial duties. This leaves counter associates with the job
of becoming the face of the business. They meet and greet customers, take orders and deal with all
register transactions. Sometimes counter associates are also in charge of filling drinks or bringing
completed orders to customers. Counter associates report to the shift supervisor on duty.

Drive-through Sales Team

Fast food restaurants that sport a drive-through must have a separate sales team to keep it
operating. In all but the largest fast food restaurants, the front line is handled by just one person
who communicates with customers via loudspeaker in order to take their orders. When customers
drive around, the drive-through associate is responsible for bringing their orders up at a register at
their counter window. Like regular counter associates, drive-through employees are often charged
with filling drinks and usually have a separate soda machine next to their register. Since drive-
through associates cannot typically leave their post, they are often assisted by a runner who picks
up customer orders from the kitchen. Drive-through associates report to the shift supervisor on
duty.

Shift Supervisors

While shift supervisors take on the responsibility of teaching, guiding and motivating the sales
associates under them, they too also work on the front line. Because shift supervisors perform the
same tasks as sales associates, they must lead by example. In addition to dealing with basic
customer orders, shift supervisors also deal exclusively with certain issues such as customer
refunds, counting the money in register drawers, or handling customer complaints. In addition, shift
supervisors may be in charge of making schedules or helping the restaurant manager with
interviews. Shift supervisors report to the restaurant general manager.

Restaurant General Manager

At the head of the sales team is the restaurant general manager. While the general manager
interacts with customer’s less than regular associates and shift supervisors, they are responsible for
setting the tone of how those interactions should be orchestrated by enforcing the policies and
protocols that define the sales team. Restaurant managers have the final word on hiring and firing
decisions and focus much of their time on ordering supplies, taking inventory, managing budgets
and doing payroll. All other associates report to the restaurant general manager.

What Is a Restaurant Team Leader?

A restaurant is a dynamic business that requires coordination between the many facets of food
production and the intricate choreography of serving customers and creating memorable dining
experiences. Restaurant managers are responsible for creating and implementing systems, but
managers are not always present on the floor, observing the flow of orders and food. Restaurant
team leaders are responsible for operations during specific shifts, playing a hands-on role by
keeping an eye on the big picture, setting priorities and troubleshooting problems.

Operational Responsibilities

A restaurant team leader takes charge of operations by overseeing inventory levels of ingredients,
packaging supplies and other essential items such as cleaning materials. She must also have a
working knowledge of equipment such as coolers, mixers and stoves, and should be able to assess
whether a problem can be fixed in house or whether it will require repair by an outside technician.
She must also be able to gauge the urgency of addressing equipment malfunctions, taking
immediate steps to address breakdowns that will interfere with food production and service.

Personnel Responsibilities

A restaurant team leader coordinates the actions of kitchen, wait staff and cleaning personnel. This
responsibility involves understanding the strengths and weaknesses of each employee, and drawing
on each worker's skills as a situation warrants. For example, serving a VIP table requires finesse,
while handling a long line of customers waiting to eat requires speed and focus. An effective team
leader will draw on his staff's respective skills in ways that are appropriate to the circumstances. He
will also motivate cooks, servers and dishwashers, bringing out the best in each individual.

Customer Service Responsibilities

A restaurant team leader takes ultimate responsibility for addressing customers' needs and
concerns. When a party makes a special request, such as a special item to celebrate a special
occasion, or a request to accommodate a food allergy, the team leader must be aware of these
situations and ensure that these needs are met. Team leaders are also responsible for making
amends to dissatisfied customers, listening to their feedback, correcting problems, and offering
refunds or free menu items as compensation.

Financial Responsibilities

A restaurant team leader is responsible for financial accounting at the end of each shift. This might
involve counting and reconciling register totals, and preparing sums for deposit. These financial
responsibilities usually require paperwork or basic bookkeeping to track data such as sales totals
and number of customers served for accounting purposes. When staff share tips, team leaders
might also be in charge of equitably dividing these funds.

Many restaurants begin life as a single location, but eventually blossom into a franchise or privately-
owned chain. When one restaurant becomes many, a new management structure must be put into
place to handle the corporate side of the business. Doing so ensures that every restaurant in the
chain is meeting the same standards.

Restaurant Managers
While technically restaurant managers operate at the highest tier of their location’s organizational
structure, they are also at the lowest tier of the corporate structure as well. This is because they are
the district manager’s contact person for their restaurant as well as the vessel that must enforce all
new and standard corporate protocols. Restaurant managers also are responsible for
communicating anything of importance to their corresponding district manager including changes
they think should be made at store level. While restaurant managers must always report directly to
their corresponding district manager, in some cases, they report to a franchisee as well.

Like other industries, the restaurant sector exists to make a profit. Restaurants' business models are
based on serving food. Unlike many other types of businesses, restaurants also offer a deeply
personal experience that is often intricately choreographed. In addition, many chefs use their
restaurants as platforms to express their culinary visions. Restaurant industry objectives are geared
towards providing a satisfying customer experience that includes enjoyable food and a relaxing
atmosphere while running an operation that is efficient enough to also make money.

Food

The objectives of a restaurant with regard to the food it serves can vary widely depending on
whether it is a fast food joint or a fine dining operation, but all restaurants must create dishes that
customers are willing to pay for and also return to eat again. Materials and labor costs for menu
items should be low enough for the restaurant to mark them up and charge a price that brings in a
profit and also feels fair to diners. Many restaurants focus on a particular style of food, such as an
ethnic cuisine or local, seasonal offerings. Such a specialty makes it easier to build a brand and
advertise to a target market.

Dining Experience

Restaurant patrons don't just go out to eat for the food. They dine out for relaxation, luxury and
convenience, among other reasons. Restaurant business objectives include creating a complete
dining experience that includes everything from the way a space is decorated to the type of music it
plays. The quality of service also enhances or ruins a dining experience. Servers should be respectful
and prompt; they should be attentive without hovering as well as knowledgeable about ingredients
and preparation methods.

Profitability

The biggest costs that a restaurant incurs are food and labor expenses. Labor includes not only
kitchen staff but also servers, hostesses and bussers. The objective of every restaurant business is
to keep these costs low enough to run a profitable operation. In addition, restaurateurs must
manage other types of expenses such as rent, advertising, utilities, equipment, maintenance and
repairs. Profitability is also a matter of increasing revenue by bringing in new customers, keeping
existing customers happy so they will return and offering a wide enough selection of items for
diners to order extras such as wine and dessert.

Longevity
Successful restaurants endure by building reputations and loyal clienteles. If a restaurant is
profitable, makes its customers happy and holds a long term lease or owns the building where it
operates, then it can continue operating indefinitely. Many restaurateurs also aim to grow their
operations beyond the limitations of their individual ownership by selling their companies or
franchising. A business owner is most likely to achieve this goal if she develops clear and effective
operational systems.

Restaurants are complex organisms, providing food and service to customers and providing a
livelihood to employees and owners. Restaurant business models are as diverse as the varieties of
food that they serve, and the details of any specific restaurant's objectives will depend on its target
market and its core offerings, such as whether it offers convenient fast food or an elegant sit-down
dining experience. Regardless of how humble or fancy they may be, all restaurants must provide a
menu that meets their customers' needs, serve food in appropriate and satisfying ways and
ultimately earn a profit.

Food

Providing food to customers involves designing a menu that is appealing and appropriate to your
target market's budget. Menu planning should be closely coordinated with purchasing systems and
supplier relationships in order to ensure that the restaurant can consistently obtain the ingredients
it needs at prices it can afford. Menu planning also involves input from kitchen staff as to whether
the proposed dishes can be prepared well in an appropriate time frame.

Service

Although the automats of another era provided food without the intervention of human hands,
virtually all contemporary restaurants use some form of interpersonal service to deliver food to
customers. Restaurant service models range from the efficient counter service provided by fast-
food establishments to the attentive, informative service that is the signature of many high-end
restaurants. Regardless of whether a restaurant provides minimal or extensive customer service,
interactions between staff and customers should be pleasant and geared toward meeting
customers' needs.

Safety

All businesses depend on keeping their customers safe, but this mandate is especially strong in the
restaurant industry, because virtually any ingredient could harbor food-borne illness if not properly
handled. Store cold foods below 41 degrees Fahrenheit and hold hot foods at temperatures of at
least 145 degrees Fahrenheit. Bleach all surfaces at appropriate intervals, throw away ingredients
that have passed their expiration dates and implement pest-control procedures to keep your
restaurant free of bugs and rodents.

Profitability
Like any other business, a restaurant must make a profit. Restaurant profitability depends on
maintaining sustainable margins by ensuring that costs -- especially for food and labor -- are low
enough relative to gross sales for proprietors to earn a living. According to the National Restaurant
Association, a typical restaurant spends about a third of its incoming revenue on payroll and about
a third on food and beverage costs. A restaurant that maintains these percentages has a better
chance of earning a profit than a restaurant whose basic costs spiral out of control.

A restaurant is a production facility of sorts. Whether your customers seek fine dining or have to fit
lunch or dinner into busy schedules, you and your staff create meals and experiences. As with any
manufacturer, your restaurant faces production and other costs. An income statement shows you
the bottom line, where and how you spend money and how you can satisfy appetites and serve
customers more efficiently and profitably.

Net Sales

Your restaurant's revenues, or net sales, come primarily from orders -- dine-in, carryout and
Internet -- and deliveries. You also want to count bar tabs; sales of bottles of wine, sauces and salad
dressings; shirts or hats with your restaurant's name; and keepsakes from the gift shop if you have
one. Many small, independent restaurants -- including pizza delivery enterprises -- take cash as their
primary form of payment. Since cash can "disappear," you need to calculate sales from records such
as receipts, not based on how much cash is in the register.

Cost of Goods Sold

The restaurant's kitchen is akin to an assembly line. The inventory component of costs of goods sold
consists of the ingredients; you take the beginning inventory, add purchases, and subtract the
ingredients left at the end of the accounting period. Since food has a very short shelf life, you will
have a small carry-over inventory; most of it consists of purchases. You include the chefs' and cooks'
pay, the depreciation on stoves and other cooking equipment, the portion of utilities devoted to the
kitchen and containers such as carryout boxes. Your net revenue, the difference between the net
sales and cost of goods sold, judges the efficiency of your kitchen.

Operating Expenses

Operating income, which is your net revenue minus operating expenses, grades how efficiently you
run the restaurant as a whole. You include as operating expenses wages and salaries for managers,
hosts or hostesses, wait staff, cashiers, table bussers and dishwashers. These employees do not
participate directly in preparing meals, so their costs are not direct costs and are not included in
costs of goods sold. Advertisements, rent and utilities for the non-kitchen parts of the restaurant,
depreciation for dish-washing equipment and delivery vehicles, and fuel for deliveries also go into
the operating expense category.

Interest and Taxes

To figure net income, subtract the interest and income taxes from operating income. Interest is
your cost of financing the building, equipment, supplies, inventory and operations of your
restaurant. Financing may consist of mortgages and other term loans and revolving credit. Calculate
the taxes by multiplying the income tax rate by the difference between operating income and
interest.

Starting up a restaurant is not for cowards. The industry's failure rate is high, and even successful
restaurants usually call for an all-consuming effort from the proprietors and chef. Careful
preliminary planning can be crucial to a restaurant's ongoing success. One of the most fundamental
decisions is how large to make the kitchen and dining rooms. The balance between production and
seating capacity is a difficult one to determine.

The Problem

A restaurant's dining room is its revenue generator, and an adequate seating area is crucial to the
business plan. The restaurant must be able to seat enough diners to pay its bills, based on the
projected average check. The area should also provide room for a service stand for the servers to
speed resetting and leave room for a bar and a coat check area if those are appropriate to the
restaurant's format. The kitchen needs enough space and equipment to produce the food for the
same projected number of diners.

Some Standard Ratios

The most common standard ratio offered for dining room to kitchen space is 60 to 40, favoring the
dining room. This is highly variable, and depends largely on the type of restaurant. For example,
consulting firm The Evans Group recommends a 3 to 1 split, with the smaller portion going to
kitchen use. The level of food and service also plays a role, with finer food taking two to three times
the kitchen space required for banquet service. Better restaurants also require more space per
diner, and therefore higher margins. Fast-service or banquet service establishments can have
smaller kitchens and larger dining rooms, making their profit from higher sales volumes. These
kitchens can occupy as little as 25 percent of the total floor space, for a 4 to 1 dining area to kitchen
ratio.

Regulatory and Space Constraints

Design decisions are further complicated by regulatory and space constraints. Jurisdictions
commonly mandate details such as the quantity of storage space and the number and placement of
restrooms. The kitchen's ventilation system must meet local construction codes, which can limit its
location within the building. Restaurants are often situated in older or historic buildings, which
contain limitations such as odd angles or small or strangely shaped rooms. These constraints often
force restaurateurs to create several small dining rooms rather than one large one, or to separate
food storage from the working section of the kitchen. An imaginative restaurateur or designer can
sometimes turn these limitations into treasured and striking design elements.

Harnessing the Variables

Although there are no hard-and-fast ratios to apply, there are some basic principles that can aid
your decision-making. For example, if the potential number of seats and your projected average
check won't let you pay your bills, you need to walk away or negotiate a better lease. If you aren't
sure about your pricing or food, seek out mentors and consultants in the local business and
restaurant community. Check with your suppliers as another potential source of information about
what works in your area and what doesn't. Excellent resources include the National Restaurant
Association, the hospitality school at Cornell University, and food-industry magazines and books.

A small town bar & grill has an advantage over the same type of restaurant in a big city -- less
competition. This doesn’t mean that operating the restaurant profitably is easy. Success in this
business depends upon the owner and staff being able to manage the myriad of tasks and little
details that add up to a great dining and entertainment experience for customers. Delivering less
than satisfactory customer service can be particularly damaging because the potential population of
customers is limited in a small town, and once patrons leave unsatisfied it is difficult to bring them
back.

Understanding Your Market

In a small town, it is not difficult for a business owner to study the demographic characteristics of
his market or who his chief competitors are. All he has to do is drive through the neighborhoods or
stroll through the business and shopping districts. He needs to decide what the largest target
markets might be and design his concept, menu and marketing strategies with the goal of attracting
these target markets. Issues such as the average income level of the town and the average age
shape these choices. A restaurant designed for the younger demographic of singles out to socialize
would look and feel completely different than one catering to families.

Menu Planning

A small town bar & grill depends on its loyal customers coming back. One way of encouraging
repeat business is to vary the menu -- adding exciting new dishes on a regular basis. Create a
newsletter that is emailed to customers and talk about upcoming menu changes. Plan the menu
with a keen eye on the cost of each item, factoring in personnel cost to prepare and serve the food,
and the overhead to run the restaurant. Focus on executing a small number of dishes to perfection
rather than having a large menu that the cook staff executes inconsistently. This not only helps
maintain high customer service but helps with cost control -- reducing waste from unsold foo d.