Tim Hortons- Performance Improvements through people -

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Performance Improvement through People Team member University of Canada West HRMT 622 – Talent Management Professor September 6, 2022 Table of Contents

Executive Summary 3 Organizational Vision and Mission 4 Critical Analysis of Performance Improvement through People 5 Industry Comparison 7 Relevant Model 8 Key Findings/Strengths, Recommendations and Development Opportunities, Implications 8 References 10 Executive Summary Tim Hortons stands as prominent chain restaurants in Canada boasting a substantial workforce dedicated to providing essential customer services. Tim Hortons uses people, especially employ- ees, to improve performance. Various events are implemented to make employees more moti- vated and productive. These events include incentives and employee benefits, training, develop- ment, and educational programs, and recognition and reward programs. These activities assist employees to gain skills, ability, and capacity they need to work effectively and improve organi- zational performance. Tim Hortons also has negative practices that hinder performance improve- ment through people. This includes conflicts with franchisees which affect employees nega- tively. Unfair treatment of employees based on their backgrounds also prevents Tim Hortons from improving the organization’s performance through people effectively. In addition, the com- pany faces competition from other top performing companies such as McDonalds and Starbucks. These companies incorporate more comprehensive strategies including employee assistance pro- grams and partnerships to engage employees. Tim Hortons can gain a competitive advantage by incorporating similar programs used by their competitors. Company History/Background Tom Hortons is a multinational coffee and restaurant chain company based in Toronto. The com- pany was founded in Hamilton, Ontario in 1964 by Jim Charade and Tim Horton. Horton later

partnered with Ron Joyce who took over operations after Horton’s death (Tim Hortons, 2018). The company deals with various products including fast food, sandwiches, donuts, and coffee. Each of the Tim Hortons’ restaurants is independently owned and operated. However, the com- pany has centralized management divided into different functional groups. Tim Hortons Inc. has one CEO, President, and a leadership executive. It then has franchisees who run different restau- rants based on Tim Horton’s agreement. The company has more than 3000 restaurants in Canada and most of them are located in Ontario. It also employs more than 6000 employees to serve its customers (Forbes, 2022). Tim Horton has exhibited impressive performances over the years. During the 2022 financial year, the chain restaurant generated a sales revenue of 2.63 billion US dollars and 1.19 billion dollars from its properties and franchisees, which was an increase from the previous year (Statista, 2023). But in between these glorious years, Timmis had a gigantic turbulence in between that shook the brand top to bottom. Organizational Vision and Mission The mission of Tim Hortons is “to deliver superior quality products and services for their guests and communities through leadership, innovation, and partnerships” (Tim Hortons, 2023). The mission statement drives the company to offer quality products and services that are character- ized with improvements in two areas including health and communities. Tim Hortons also has a vision “to be the quality leader in everything they do” (Tim Hortons, 2023). The vision presents the company as more than just a restaurant but also a business that strives to do more and be a leader in the industry. A malgamation of the Cultural Elements and SWOTs of Tim Horton: In its domestic market of Canada, Tim Hor- tons is an institution. The brand operates 3,698 stores across the country, covering ev- ery province including the sparsely popu- lated Nunavut. Eight out of ten cups of cof- fee sold across Canada are from Tim Hor- tons, with 15% of the country’spopulation thought to visit the chain daily.

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Tim Hortons, a Canadian restaurant chain known for its coffee and doughnuts, has had an ex- haustive financial journey until 2022. After the 2000-01 recession, in which several of its domestic coffee-and- doughnut competitors failed or faltered, Tim Hortons be- came the largest fast-food chain in Canada. It had ex- panded into lunch meals and surpassed McDonald’s in sales in Canada in 2002. In 2009, Tim Hortons sur- passed 3,000 outlets in Canada (with 600 in the United States). In 2010, its outlets served about 8 of 10 cups of coffee sold by Canadian restaurants. The company was running out of domestic expansion opportunities, and its annual Roll Up the Rim contest was becoming increas- ingly expensive as it contended with increased competition from McDonald’s, which made a for- midable commitment to the coffee market with its McCafé concept. In 2022, Tim Hortons was still facing challenges, including a petition asking the company to commit to developing and us- ing a fully recyclable and compostable cup. Meanwhile, McDonald's announced in 2011 that it would spend $1 billion renovating its stores in Canada, as competition with Tim Hortons was heating up. In 2016, Tim Hortons' total revenue was US$4.15 billion, including US$1.11 billion in the fourth quarter. In 2017, Tim Hortons generated revenue of approximately 3.15 billion USD. In the first quarter of 2023, Tim Hortons increased sales by about 11 per cent to US$1.73 billion compared with the first quarter of 2022. In the same quarter, Tim Hortons' overall revenue grew by 9.6 per cent year over year, to US$1.49-billion. In fiscal 2013, Tim Hortons had an impressive turnover of £3.07 billion dollars, earning it the exalted status of the world's second-largest coffee indul- gence company, right behind the colossal Starbucks empire. While Starbucks casts a terrible shadow with its incredible $15 billion in sales and global network of 19,767 stores, Tim Hortons has managed to leave a lasting impression in the annals of the coffee industry with its network of 4,740 stores. In the same fiscal year 2013, total sales of Burger Kings were approximately $1.15 billion, confirming its prominent position in the world of fast-food outlets worldwide. Tim Horton has a mark especially in Canada, it’s home ground: The highest market share was captured by Tim Hortons conquering two major brands other side:

Tim's was selling every second cup through their counters: Valley to the Gally: But here comes a fall not as the season but the fall of, one of the most prominent Canadian cof- fees brand. Timmie’s certainly fell front face down once upon a time. The large period was be- tween ’15 to ’18. Somewhere in ’15-’16, they tumbled by around 45 positions down in Canada, which is very much a hometown of the brand. Not that other brands have not or never tasted the taste of soil. Just a year before Times just experienced a free fall from 27 th to 203 rd place on the parameter of brand trust and when you jump off the cliff, it the distance becomes quire a short from an icon to the lost identity, but with Tim’s it was different this time. This was really con- cerning as not only the profit or partners were impacted, here the whipping was at the brand level. The issues were at much larger level, starting from owner’s conflicts, worker’s compensa- tions and policies of polities, unfriendly ads those didn’t connect the audience with the brand,

and many more of these adding to the social media and other media goof-ups where brand lost on both the sides, internally and externally; internally the battel with employees and partners vs external issues among popularity of the product (coffee) and shares. The setback was much denting as the credibility of more than five decades was walking on the edge of the sword. The Emotional Cultural Connection which was blessed by the Canadians was to shatter once new bosses came in. The letter, which was shared on Facebook last month and originally reported by CBC, notifies employees that breaks would no longer be paid and that individuals with more than five years of service will be required to fund half of the cost of their benefits, whereas their company previ- ously covered the full cost. “We apologize for these changes,” the letter reads. “Once the costs of the future are better known we may bring back some or all of the benefits we have had to re- move.” The institution has a strained affinity with Tim Hortons and RBI. In June, a $500 million com- plaint was brought over RBI on behalf of a GWNFA associates, charging that the business mis- appropriated funds from a national advertising fund. In October, the organisation lodged a new lawsuit, alleging RBI of attempting to "interfere with, restrict, penalise, or threaten franchisees from exercising their rights to associate." (The charges have not been tested in court, and the RBI rejects them.) In reaction to the province's minimum wage increase, the owners of a Tim Hortons franchise in Cobourg, Ont., wrote a memo to employees requesting them to sign a paper admitting the fore- going of certain benefits, paid breaks, and other incentives. (On January 1, the minimum wage increased from $11.40 to $14 every hour. It will rise to $15 per hour the next year.) On Valentines Day, a group of protesters chanted outside a local Toronto Tim Hortons: ‘Hold the sugar. Hold the cream. Tim Hortons, don’t be mean.’ Had to Fix The Dent: Roll up the Rim: Brand launches “Roll up the Rim” program. The program was massive and the hampers were gigantic ones. Lot of customers gained confidence back. But the brand realized that they had to do much more than this. With every progressive ride, some splashes of the mud was expected and the same happened once Timmis launched this new recovery cam- paign. And as the company tried to pro- mote its “Roll up the Rim” giveaways that month, customers replied by asking if the prizes this year might include paid breaks and basic health benefits.” And here is the splash. The splash, and many more on the way:

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So, does this mean that the new Roll Up the Rim prizes at Tim Hortons will be TVs, trips, paid breaks, and basic benefits? — Dani Stover (@danigray) January 5, 2018 Even LinkedIn witnessed the ownership culture: Tim’s more than 1,500 restaurant owners are Canadians who live in communities across the country, employing over 100,000 people. It’s local Owners and their teams care deeply about the communities they serve. In spite of having such massive potential, Hortons claim company size between 51-200 employees having been able to involve only 305 team members on LinkedIn. https://www.linkedin.com/company/tim-horton/about Renovation Rolled: Tim Hortons unveiled a $700 million makeover intended to fully modernise the look of its out- lets throughout Canada in March, just a few weeks after reporting its seventh consecutive quarter of flat or declining same-store sales. What isn't to enjoy having a new look? a lot. Consumers preferred much easier improvements compared to a top-down remodel, whereas owners protested concerning the huge cost of the renovations that would be required of them: @TimHortons – what’s the point in renovating your stores when there’s absolutely no effort by your staff to clean them? Your lobbies are dirty and your washrooms are almost unus- able. @TimHortons #TimHortons — Pat (@PearlJamPat) March 28, 2018 Splashes will continue: Just put the sleeve on coffee cups.(4th July 2023) Anita A I most probably will stop drinking coffee at tims, either change Ur cup quality or just put the sleeve, even the sleeve slips off while holding. On without us asking. Even McDonald's has bet- ter cups without the coffee spilling, thus always coffee on the covers town they are in a hurry thru the driveway, I just can't hold a hot coffee cup.plz CHANGE it, lovur coffee. Wouldn't want to go anywhere else. Gone terribly downhill (22nd April 2023) Roy A Location at Carlton & Jarvis After the 2nd renovation No longer has Washroom facilities for pa- trons the stools at the counter seating area are gone. The management thinks the right time to clean the public area and take out the garbage is whenever it's the busiest. Cream dispensers are a nightmare. Every Morning shift has to halt for 5 minutes to change the huge bag of cream. Modern technology could fix this, I'm sure! Turning away 20 % of their business from people who want fast food FAST. Have not seen the manager in 5 months! Accidently charged me for a

Cookie this morning, stated it was a glitch in the cash register? This place needs New Manage- ment. Critical Analysis of Performance Improvement through People Tim Hortons Inc has been operating in Canada for many years successfully. One of the factors contributing to its success is performance improvement through people. Companies can count on adequate resources such as technology and financial power to foster business success. However, people play a critical role in executing roles that utilize the resources to produce end products. Tim Hortons uses people as part of their plan to enhance the business. Different ways are used to improve business performance through people. One of the ways in which Tim Hortons improves business is through training and development. The company offers training programs to newly hired employees to help them develop skill set needed to deliver services at the company effectively. Existing employees also complete compre- hensive training to help them keep up with diverse and changing customer demands. In addition to the job training programs, Tim Hortons also offers scholarship programs for employees pursu- ing academic goals and secondary education (Job Application, 2023). Employees with necessary skill set and knowledge carry out their duties effectively leading to improved performance at in- dividual and organizational level (Škrinjarić, 2022). Tim Hortons also provides its employees with multiple incentive programs. These incentives in- clude benefits such as flexible hours, advancement opportunities, free uniforms, convenient loca- tions, and competitive salaries. Qualified employees also receive health benefits related to dis- ability, vision, prescription drugs and more (Job Application, 2023). According to Liu & Liu (2022), incentive programs increase employee motivation and performance. Aggregate employee performance results in increased organizational performance. Therefore, by offering incentives to employees, Tom Hortons improves the company’s performance through employees’ increased efficacy and productivity. Another strategy used by Tim Hortons to improve performance through people is recognition and rewards which boosts employee morale. A study conducted in the company shows that em- ployees feel cared for by their managers 100%. 56% of these employees also stated that recogni- tion increases their morale to go to work compared to 44% who said this was not a factor that boosted their morale. Liu & Liu (2022) link increased morale with high employee and organiza- tional performance. The figures below show the above-mentioned relationships between recogni- tion, morale, and performance. How well does Tim Horton perform in boosting morale?

Source: https://www.comparably.com/companies/tim-hortons/morale The same way Tim Hortons uses employees to improve its performance, these employees can also contribute to low performance. Not all efforts by the company have been embraced by em- ployees or improved performance. Tim Hortons is known for its fights with franchisees which have persistent in the recent past. This became a problem when the company merged with Restaurant Brands International Inc. whereby management rules were tightened. This did not only make franchisees unhappy but also upset employees and reduced their morale (Warner, 2022). One of the outcomes of the conflicts between Tim Hortons and its franchisees is em- ployee layoffs. Dismissals can create uncertainty and insecurity among employees regarding their job security. In turn, fear can create anxiety which reduces employee efficacy and produc- tivity leading to reduced organizational performance through people. An article by the CBC (2015) has also reported several incidences of racism, discrimination, and poor living conditions of Tim Horton employees. Individuals facing poor human rights issues challenges are dissatis- fied and are less likely to be effective in their work hence can prevent or slowdown organiza- tional performance (Durand-Moreau et al., 2022). Tim Hortons stands to lower its performance due to reduced employee productivity adversely affected by racism, discrimination, and poor liv- ing conditions of some employees. Decided to Drive Business and Performance Through Culture: After a long, strong hold in the market, Tim’s back with the Customer Loyalty spite of delaying the loyalty program me (post 206): There is still a significant scope for more Tim Hortons in Canada, however this part of the mar- ket grabbing needs sincere research: It is within these specific locales that the prospect of further expansion assumes a precarious as- pect, as it could inadvertently lead to the phenomenon of market saturation, a condition fraught with the potential for yielding diminishing returns for newly established outlets. Consequently, Tim Hortons is compelled to perpetually engage in a rigorous process of evaluation, necessitat- ing an astute examination of whether there persists a substantial and unquenchable demand for its diverse array of consumables, encompassing both its existing offerings and those earmarked for nascent markets. In light of this intricate competitive milieu, Tim Hortons is compelled to en- gage in a judicious exercise of contemplation and strategic planning. Each potential expansion endeavor necessitates a meticulous analysis of the competitive dynamics inherent to the specific region under consideration, serving as the compass guiding the decision-making process regard- ing the establishment of novel outlets. The inherent volatility within the economic landscape

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beckons for a prudent assessment of the prevailing conditions, thereby informing the decision- making apparatus underlying expansion initiatives. This strategic evolution has borne witness to an expansion beyond the traditional confines of coffee and donuts, with the brand now embrac- ing a substantially broader spectrum of gastronomic offerings. Yet, it remains imperative to ac- knowledge that the success of such diversification endeavours hinges significantly on the enthu- siastic embrace and interest displayed by prospective franchisees, who represent the backbone of the organization's expansion strategy. To ascertain whether the Canadian market still warrants the establishment of additional Tim Hortons establishments, the corporation finds itself im- mersed in an elaborate process of empirical inquiry. This multifaceted process incorporates com- prehensive market research endeavours, the meticulous analysis of ever-evolving consumer trends, and a comprehensive evaluation of the multifarious factors elucidated heretofore. It is within this realm of empirical scrutiny that Tim Hortons endeavours to distil a comprehensive understanding of the prevailing conditions, gauging the necessity and feasibility of further prolif- eration. Additionally, an intrinsic facet of this deliberative process is the introspective examina- tion of whether the brand retains the intrinsic capacity to distinguish itself effectively within the dynamic landscape of Canadian consumer preferences, a mandate of paramount importance in the ongoing pursuit of its market objectives. Industry Comparison In addition to the challenges faced with Tim Hortons franchisees and poor human rights promo- tion, the company also faces competition from competitors such as McDonalds and Starbucks, which it should overcome. McDonalds has a more established system of enhancing employee performance compared to Tim Hortons. The system includes conversations with employees to promote business growth. The company also offers individual career growth opportunities and value-led leadership which Tim Hortons does not. McDonalds also has a BEST model for devel- oping, hiring, and assessing talent. The company’s effort to ensure high performance starts be- fore potential employees join the company unlike Tim Hortons where employees’ development starts after joining the group. Starbucks also has an employee assistance program which is essential in shaping employee skills and productivity after employee performance reviews and feedback. Leaders can use the pro- grams to assist employees address issues identified during performance appraisal and increase performance efficacy. Starbucks also treats its employees as partners and gives them a chance to buy stocks in the company (Starbucks, 2014). Owning shares transfers part of company owner- ship to individuals and can increase their responsibility efficacy. Starbucks uses partnership with employees by allowing those eligible share owners thus improving their engagement and perfor- mance (Tikson, 2018). Relevant Model The Hofstede Model plays a crucial role in understanding and analyzing organizational culture. Tim Hortons’ focus on people investment to improve organizational performance can be based on the Hofstede’s model internal versus external paradigm (Hofstede, 2011). The paradigm is not directly related to the original five cultural dimensions of the model. However, each of the five dimensions can be classified as internal or external to promote organizational behavior analysis. For instance, when considering the orientation dimension, short term orientations can be consid- ered as internal while long term orientations as external. Efforts to improve employee morale are short-term business strategies involving internal resources like personnel.

Key Findings/Strengths, Recommendations and Development Opportunities, Implications Analysis of Tom Hortons’ performance improvement through people shows various strengths that make the company more competitive. Tim Hortons offers training and development opportu- nities to its employees. The efforts enhance education levels, skills, and knowledge of employees enabling them to perform better, improving the company’s performance. The company also of- fers multiple benefits to employees in addition to recognition and reward programs. These ele- ments increase employee morale and the ability to perform better. Tim Hortons needs to improve some areas for more improved performance through people. The company can define employee engagement and development models more clearly. This can in- clude adding practices such as an employee assistance program to assist employees minimize their weaknesses and optimize their strengths after performance appraisal. The company should also minimize its conflicts with the franchisees to reduce the negative impact on employees while reducing turnover. Implementing new approaches, like providing eligible staff the opportu- nity to become partners and actively fostering diversity and inclusivity, presents an additional av- enue for enhancing employee engagement and boosting overall performance. Conclusion Tim Hortons as a well-known restaurant in Canada. Its position is attributed to the company’s performance. People in the company, including employees, are some of the avenues the company uses to derive performance. Practices such as reward programs, incentives, training and develop- ment programs enable employees to work more effectively and increase organizational perfor- mance. Tim Hortons can introduce additional efforts including employee partnerships and em- ployee assistance programs to engage employees more and enhance their motivation to work. Improved organizational performance can also be achieved by aligning the company’s goals with those of franchisees to avoid conflicts that adversely impact employees. Tim Hortons should also implement plans for improving equal and fair employee treatment. References CBC, (2015). Tim Hortons' complaints continue to percolate with the B.C. Human Rights Tri- bunal. https://www.cbc.ca/news/canada/british-columbia/tim-hortons-bc-human-right-complaint- 1.3311652 Durand-Moreau, Q., Lafontaine, J., & Ward, J. (2022). Work and health challenges of Indige- nous people in Canada. The Lancet Global Health, 10(8), e1189-e1197. DOI:https://doi.org/ 10.1016/S2214-109X(22)00203-0 Forbes (2022). Profile: Tim Hortons. https://www.forbes.com/companies/tim-hortons/? sh=549932faa34b Hofstede, G. (2011). Dimensionalizing cultures: The Hofstede model in context.Online readings in psychology and culture,2(1), 2307-0919.Igi-global (2022). What is Ethnic Diversity? https:// www.igi-global.com/dictionary/ethnic-diversity/82555

Job Application, (2023). Online Job Application for Tim Hortons Jobs. https://ca.job-application- s.com/tim-hortons-application/#:~:text=Tim%20Hortons%20Work%20Benefits&text=Addition- ally%2C%20Tim%20Hortons%20provides%20incentive,which%20develop%20crew%20mem- ber%20skills. Liu, W., & Liu, Y. (2022). The impact of incentives on job performance, business cycle, and population health in emerging economies. Frontiers in public health, 9, 778101. https://doi.org/ 10.3389/fpubh.2021.778101 McDonalds, (2022). Talent & Benefits. https://corporate.mcdonalds.com/corpmcd/our-purpose- and-impact/jobs-inclusion-and-empowerment/talent-and-benefits.html Škrinjarić, B. (2022). Competence-based approaches in organizational and individual context. Humanities and social sciences communications, 9(1), 1-12. https://doi.org/10.1057/s41599-022- 01047-1 Starbucks, (2014). Your Special Blend. https://globalassets.starbucks.com/assets/ 9a06a16271f34d3b97636281f67bdb23.pdf Statista, (2023). Revenue of Tim Hortons from 2015 to 2022, by segment (in billion U.S. dol- lars). https://www.statista.com/statistics/291515/annual-revenues-tim-hortons-by-segment/ #:~:text=Toronto%2Dbased%20quick%20service%20restaurant,compared%20to%20the %20previous%20year. Tikson, S. D. S. (2018). Human resource policies and work culture: A case of Starbucks. JBMI (Jurnal Bisnis, Manajemen, dan Informatika), 15(1), 1-12. DOI:10.26487/jbmi. v15i1.1773 Tim Hortons, (2018). Our history. https://timhortons.ph/our-history Tim Hortons, (2023). Tim Hortons Mission and Vision Statements Analysis. https://mission- statement.com/tim-hortons/ Warner, A., (2022). The Real Reason Tim Hortons Is Struggling. https://www.mashed.com/ 186844/the-real-reason-tim-hortons-is-struggling/ https://www.drinks-insight-network.com/comment/tim-hortonss-uk-coffee-shop-launch-appears- little-late/ https://iide.co/case-studies/swot-analysis-of-tim-hortons/ https://fedica.com/blog/do-canadians-love-tim-hortons-or-starbucks/ https://fedica.com/blog/do-canadians-love-tim-hortons-or-starbucks/ https://fedica. - com/blog/do-canadians-love-tim-hortons-or-starbucks/

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