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What is the underlying problem in this case from the fast-food industry’s perspective?

What is the underlying problem in this case from the fast-food industry’s perspective?

Understanding Business
Understanding Business
12th Edition
ISBN:9781259929434
Author:William Nickels
Publisher:William Nickels
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
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What is the underlying problem in this case from the fast-food industry’s perspective?
up the rungs, never was a manager, never achieved anything of significance in my time there." Industry spokespersons tout opportunities for hard-working employees to become top managers and even franchisees, but most workers' lifetime earnings would barely cover the $750,000+ required to open a franchise. Second, fast-food workers perceive strong pay inequity. Most earn minimum wage, and restaurants keep the majority of their workforce part-time to avoid paying benefits. Over half of fast-food workers rely on some form of governmental assistance, and many earn extra hours by splitting their time across multiple restaurants. Terrence Wise told a reporter about the intricate bus-hopping route he'd devised to travel between his jobs at a Burger King and a McDonald's in Kansas City, adding that he was sometimes lucky enough to get two 8-hour shifts in a single day. Wise still earned $8 per hour after 11 years with Burger King. U.S. fast-food workers earn an average hourly wage of $9.09, meaning that even 40 hours a week wouldn't put a family of three above the poverty line. While fast-food CEOs have earned increasingly higher pay over the years, employees' wages have remained stagnant. Recently, workers at restaurants including Papa John's, McDonald's, Jimmy John's, Chipotle, Taco Bell, and Carl's Jr. have filed wage-theft suits. These suits allege that employers intentionally underpaid them by failing to pay overtime, taking illegal deductions, forcing people to work off the clock, or paying below-minimum wages. Third, people often mistreat fast-food employees. According to one former worker, "Customers always wait in the wings, ready to scream, throw drinks and use racial slurs over a lack of ketchup." A Starbucks' barista described her job as "incredibly tiresome" because "we're getting screamed at by customers for not being fast enough, so we try to go fast, and we mess up the money, or we mess up the drinks, and then we get yelled at for messing up the money and messing up the drinks." Shantel Walker, a 30+ year Papa John's veteran, said "customers... don't see the retaliatory measures happening behind that counter... they don't see your hours getting cut and cut. They don't see your boss talking to you like you're worthless." INDUSTRY OUTCOMES Employees and organizations in this industry have experienced two key outcomes. First, workers suffer stress- related health problems. Studies show fast-food workers experience more stress than others in equally demanding careers because of their jobs' characteristic absence of both job security and control. Further, the emotional labour of constantly pretending to be happy and engaged with customers, regardless of what's happening behind the counter, leads to job dissatisfaction, burnout, and even substance abuse. One long-time worker says she uses illicit drugs to decrease the stress she experiences from the "fake feelings" she has to exhibit on the job. National surveys indicate over 17 percent of food service workers use illegal substances. Second, the industry is facing record-high turnover rates. Recent data indicate a 150 percent turnover rate in fast food-the highest ever recorded in the industry's history. Some blame restaurants' rapid introductions of new technologies (delivery services, self-ordering kiosks, mobile ordering). Adapting to new technologies takes time, and many restaurants aren't providing the necessary training resources to ensure workers feel they can use the tools proficiently. McDonald's CEO Steve Easterbrook said, "It's going to get increasingly challenging to attract the talent you want into your business... and then you've got to work really hard through training and development to retain them." SMALL IMPROVEMENTS Recent grassroots campaigns and non-profits such as Fight for $15 and Fast-Food Justice have had at least small positive impacts on the industry. For example, although fast-food workers still can't unionize, new laws in cities like San Francisco, Seattle, and New York are helping workers organize, and some cities have enacted wage protections and scheduling requirements to give employees more job stability and predictability. New York City Comptroller Scott Stringer sees the improvements as part of a larger movement of "economic justice" that he hopes Fourth, high-pressure fast-food environments present physical safety hazards for workers. In 2015, employees filed will spread to fast-food organizations across the country. federal complaints against McDonald's for unsafe work environments, saying understaffing meant employees were pressured to cook food too quickly and without adequate time to mop up messes or to allow fryers to cool before changing oil. The employees said this led to falls and burn injuries and that restaurants didn't provide even basic first-aid supplies, often instructing them to treat burns with condiments.
Transcribed Image Text:up the rungs, never was a manager, never achieved anything of significance in my time there." Industry spokespersons tout opportunities for hard-working employees to become top managers and even franchisees, but most workers' lifetime earnings would barely cover the $750,000+ required to open a franchise. Second, fast-food workers perceive strong pay inequity. Most earn minimum wage, and restaurants keep the majority of their workforce part-time to avoid paying benefits. Over half of fast-food workers rely on some form of governmental assistance, and many earn extra hours by splitting their time across multiple restaurants. Terrence Wise told a reporter about the intricate bus-hopping route he'd devised to travel between his jobs at a Burger King and a McDonald's in Kansas City, adding that he was sometimes lucky enough to get two 8-hour shifts in a single day. Wise still earned $8 per hour after 11 years with Burger King. U.S. fast-food workers earn an average hourly wage of $9.09, meaning that even 40 hours a week wouldn't put a family of three above the poverty line. While fast-food CEOs have earned increasingly higher pay over the years, employees' wages have remained stagnant. Recently, workers at restaurants including Papa John's, McDonald's, Jimmy John's, Chipotle, Taco Bell, and Carl's Jr. have filed wage-theft suits. These suits allege that employers intentionally underpaid them by failing to pay overtime, taking illegal deductions, forcing people to work off the clock, or paying below-minimum wages. Third, people often mistreat fast-food employees. According to one former worker, "Customers always wait in the wings, ready to scream, throw drinks and use racial slurs over a lack of ketchup." A Starbucks' barista described her job as "incredibly tiresome" because "we're getting screamed at by customers for not being fast enough, so we try to go fast, and we mess up the money, or we mess up the drinks, and then we get yelled at for messing up the money and messing up the drinks." Shantel Walker, a 30+ year Papa John's veteran, said "customers... don't see the retaliatory measures happening behind that counter... they don't see your hours getting cut and cut. They don't see your boss talking to you like you're worthless." INDUSTRY OUTCOMES Employees and organizations in this industry have experienced two key outcomes. First, workers suffer stress- related health problems. Studies show fast-food workers experience more stress than others in equally demanding careers because of their jobs' characteristic absence of both job security and control. Further, the emotional labour of constantly pretending to be happy and engaged with customers, regardless of what's happening behind the counter, leads to job dissatisfaction, burnout, and even substance abuse. One long-time worker says she uses illicit drugs to decrease the stress she experiences from the "fake feelings" she has to exhibit on the job. National surveys indicate over 17 percent of food service workers use illegal substances. Second, the industry is facing record-high turnover rates. Recent data indicate a 150 percent turnover rate in fast food-the highest ever recorded in the industry's history. Some blame restaurants' rapid introductions of new technologies (delivery services, self-ordering kiosks, mobile ordering). Adapting to new technologies takes time, and many restaurants aren't providing the necessary training resources to ensure workers feel they can use the tools proficiently. McDonald's CEO Steve Easterbrook said, "It's going to get increasingly challenging to attract the talent you want into your business... and then you've got to work really hard through training and development to retain them." SMALL IMPROVEMENTS Recent grassroots campaigns and non-profits such as Fight for $15 and Fast-Food Justice have had at least small positive impacts on the industry. For example, although fast-food workers still can't unionize, new laws in cities like San Francisco, Seattle, and New York are helping workers organize, and some cities have enacted wage protections and scheduling requirements to give employees more job stability and predictability. New York City Comptroller Scott Stringer sees the improvements as part of a larger movement of "economic justice" that he hopes Fourth, high-pressure fast-food environments present physical safety hazards for workers. In 2015, employees filed will spread to fast-food organizations across the country. federal complaints against McDonald's for unsafe work environments, saying understaffing meant employees were pressured to cook food too quickly and without adequate time to mop up messes or to allow fryers to cool before changing oil. The employees said this led to falls and burn injuries and that restaurants didn't provide even basic first-aid supplies, often instructing them to treat burns with condiments.
Motivation Challenges in the Fast-Food World Fast-food jobs-frying potatoes and flipping burgers in hot, cramped spaces for troves of impatient customers- are generally viewed as temporary gigs filled primarily by teenagers wanting extra spending money. In turn, fast- food companies needn't worry about paying living wages, making work meaningful, or providing opportunities for growth because workers won't stick around long enough for these things to matter. This was true as recently as the 1980s, when the majority of fast-food workers were teenagers. But today, 75 percent of workers are at least 20 years old, and one-third have their own children. Industry employees now describe "unbearable" work environments that include low pay, harsh physical and emotional conditions, and rapidly changing technology, combined with insufficient staff levels and training. Evidence suggests the fast-food industry hasn't done much to change its approach to motivating workers, despite its changing landscape and consistent revenue growth in the last 15 years. A DAY IN THE LIFE OF A FAST-FOOD WORKER There are four key reasons fast-food work doesn't motivate employees. First, these jobs are designed with few motivating characteristics, with one study describing them as "low-skilled, alienating, standardized, and highly routinized." Some tasks are so repetitive that restaurants are exploring whether robots can do them. There are also few opportunities for advancement. Data indicate about 90 percent of fast-food workers occupy front-line jobs (cook, cashier), with most of the remaining 10 percent in low-level supervisory positions. Only 2 percent of fast- food jobs are upper-level managerial, professional, or technical roles, compared with 31 percent of the jobs in the United States. One former fast-food worker says, "I spent four years working at McDonald's... I never advanced
Transcribed Image Text:Motivation Challenges in the Fast-Food World Fast-food jobs-frying potatoes and flipping burgers in hot, cramped spaces for troves of impatient customers- are generally viewed as temporary gigs filled primarily by teenagers wanting extra spending money. In turn, fast- food companies needn't worry about paying living wages, making work meaningful, or providing opportunities for growth because workers won't stick around long enough for these things to matter. This was true as recently as the 1980s, when the majority of fast-food workers were teenagers. But today, 75 percent of workers are at least 20 years old, and one-third have their own children. Industry employees now describe "unbearable" work environments that include low pay, harsh physical and emotional conditions, and rapidly changing technology, combined with insufficient staff levels and training. Evidence suggests the fast-food industry hasn't done much to change its approach to motivating workers, despite its changing landscape and consistent revenue growth in the last 15 years. A DAY IN THE LIFE OF A FAST-FOOD WORKER There are four key reasons fast-food work doesn't motivate employees. First, these jobs are designed with few motivating characteristics, with one study describing them as "low-skilled, alienating, standardized, and highly routinized." Some tasks are so repetitive that restaurants are exploring whether robots can do them. There are also few opportunities for advancement. Data indicate about 90 percent of fast-food workers occupy front-line jobs (cook, cashier), with most of the remaining 10 percent in low-level supervisory positions. Only 2 percent of fast- food jobs are upper-level managerial, professional, or technical roles, compared with 31 percent of the jobs in the United States. One former fast-food worker says, "I spent four years working at McDonald's... I never advanced
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