Dash Management Inc'

1
Dash Management Inc.

• Group 5
• Denise Biggs
• Doris Leung
• Muffadal Saylawala
• Tyler Smith

2
Background

• Dash Management, owned by Dwight Miller, owns and
  operates six McDonalds franchises.
• Stores are performing at a high level.
• Miller renovated the stores a couple years ago.

3
McDonalds Franchise Strategy

• ?

4
McDonalds Franchise Strategy

• Quality
• Service
• Cleanliness
• Value

5
Performance Measures that Determine Rewards

• Effective or Not?

6
Performance Measures that Determine Rewards

• Overall, it appears to be effective.
• Measures of controllable items.

7
Individual vs Group rewards

• Individual rewards?
• Group rewards?

8
Individual vs Group rewards

• Individual rewards
• Verbal praise
• Awards such as coupons for free food
• Pay raises
• Promotion
• Group rewards
• Bonus generated from the base amount

9
Individual vs Group rewards

• Effective?

10
Individual vs Group rewards

• Agency Theory
• Principal Dash Management, McDonalds
• Agent Managers, crews
• Combination of individual and group rewards
  reduce agency costs

11
Individual vs Group rewards
Overall Effectiveness

• Group
• Reinforce organizational goals
• Better coordination

• Individual
• Prevent free-rider problems

12
Individual vs Group rewards

• Potential Problem?
• 100, 50, 25 of base amount as bonus for Store
  manager, Assistant Store manager, Swing manager
• Fair amount of rewards in accordance to their
  responsibilities and efforts?

13
Continuous vs. Discontinuous
14
Continuous vs. Discontinuous

• Continuous
• Doesnt use significantly
• Discontinuous
• Bonuses
• Raises
• Promotion
• Demotion

15
Continuous vs. Discontinuous
Overall Effectiveness
16
Continuous vs. Discontinuous
Overall Effectiveness

• Discontinuous
• Encourages managers to perform better
• Easier to measure

17
On-Time vs. Delayed
18
On-Time vs. Delayed

• On-Time
• Verbal praise
• Complaints
• Delayed
• Bonuses
• Promotions
• Demotions

19
On-Time vs. Delayed
Overall Effectiveness
20
On-Time vs. Delayed
Overall Effectiveness

• On-Time
• Immediate feedback

• Delayed
• Extend managers horizon

21
Positive vs. Negative
22
Positive vs. Negative

• Positive
• Verbal praise
• Coupons for free food
• Bonuses
• Pay raises
• Negative
• Deductions from base of bonus
• Demotions

23
Bonus and Penalty Incentives

• Nonmonetary payoffs
• Make people feel appreciated
• Subjective evaluations of risky prospects
• Loss more hurtful than forgone gain
• Implicit contract terms bonuses and penalties as
  incomplete contracts
• Big bonuses big promotion
• Implicit contract base as guarantee
• In penalty contract, base becomes uncertain

24
Positive vs. Negative
Overall Effectiveness
25
Positive vs. Negative
Overall Effectiveness

• Positive
• Motivates managers to achieve QSC V

• Negative
• Motivates managers to achieve QSC V

26
Suggestions
27
Suggestions

• Use profit margin to compare managers across the
  six franchises
• New Management Grading Sheet

28
Questions?

• What questions do you have?