BENCHMARKING APPROACH
ISSUE DESCRIPTION: The Riordan sales staff is having trouble retaining top performers with their current compensation and rewards system. Morale and work ethic are on the decline.
Alternative Solution: Enhance employee retention by upgrading the way employees are compensated and rewarded.
Company Benchmarked: Sonic Drive-Ins
The Chief Financial Officer Dale Edgel is concerned that in the past 12 months Riordan's turnover rates have increased. There is normal level of turnover that a company is expected to have, but Riordan's level has increased from its norm. Mr. Edgel is also concerned that some of Riordan's key personnel will leave the company and take their knowledge and training with them. According to Noe & Hollenbeck, "organizations must try to ensure that good performers want to stay with the organization and those employees whose performance is chronically low are encouraged or forced to leave" (2005, p. 309).
Sonic Drive-In is a 1950's style fast food chain headquartered in Oklahoma City which serves hamburgers and other types of famous fast food ("Working Class: Employee Retention Takes More Than Just a Free Lunch", 2003). Director of operations Diane Prem noticed prior to 1994 that the company had high levels of employee turnover. To solve this problem and ensure they retained top performers they created an employee retention program called "Showdown for Sonic Gold". The program resembled Olympic style games for employees. Some of the features of the program was "The Dr. Pepper Games" that had categories such as Carhop that enabled employees to compete for the best food delivery. The next event was Fountain where employees competed for the tastiest drink preparation. The Switchboard event was used f ...