The human side of food and beverage cost controls. (Food & Beverage).

At this point in your private club career you've read a variety of articles and attended a number of education sessions focused on food and beverage cost controls. There is no lack of information on procedures for purchasing, receiving, storage, issuance, preparation, portion controls, serving, staffing, and labor scheduling. The subject has been analyzed, scrutinized, sliced, and diced by the top experts in the field -- to the point that there's not much left to say.

Except for one thing -- all of these treatments have missed the most important ingredient in cost controls -- people, the human factor. The traditional approach has stressed a controlling atmosphere of strict procedures and measurement devices, assuming that employees cannot be trusted to do the right thing on their own.

Anyone who has looked at this subject from the human perspective understands that if your people are not internally driven to control costs, no amount of pressure from external controls will be effective. This seems like an obvious point, but we often see clubs tightening the screws in the form of more stringent procedures and controls, instead of taking the time to build employee loyalty and a sense of personal responsibility.

Why do clubs (and many other organizations) lean toward procedures and away from people? First of all, building loyalty takes time. And it takes personal involvement from the club's management team. Today's club managers and department heads are so swamped with meetings, discussions, and other administrative chores that they often lose sight of the need to spend time with their employees -- all of their employees.

Second, some managers haven't yet realized that long term, people don't respond well to heavy-handed control tactics. Used over a long period of time, these practices will drive away the best performers and leave the club with the rest -- often a group of under-performers with nowhere else to go.

Each year, as we work in the private club industry as consultants, we have the opportunity to observe more than 150 club managers and many hundreds of department heads and supervisors as they interact with their subordinates. Here are some fundamental approaches used by the most successful of them to increase employee loyalty and personal responsibility:

1. Acknowledge that your employees are the club's most valuable asset, and treat them accordingly. This point seems self-evident. Yet as we visit with clubs in our daily work, this simple measure of human respect is often cast aside -- replaced by layers of impersonal procedures, rules, and guidelines. The bottom line is simple: employees who feel valued are more likely to adhere to the club's rules and regulations than those who feel unappreciated.

2. Treat all employees with dignity and respect. Again, that's an obvious point. But we hear countless stories of management's insensitivity to basic employee needs. Angry tirades by the prima donna executive chef, scheduling favoritism by the dining room manager, and an unwillingness to address difficult people issues by the clubhouse manager all lead employees to lower their respect for management as a whole. And as their respect is lowered, so goes their concern for controls.

3. Encourage employee involvement. There are two good reasons for adopting this practice. First, involving employees in operational discussions and decisions makes them part of the solution -- instead of the problem. Second, employees know things management doesn't. Lots of good ideas and suggestions will surface from your employees if you offer them an opportunity to participate.

4. Reward productivity and performance with higher wages. Compensation politics in a club can be a morale killer. Often certain individuals are unjustly rewarded for simple longevity, or "because the members like them" (even when they are insufferable to other staff). This kind of favoritism sends a negative message to the club's other employees, who are often performing at a higher level, but are paid less. Weeding out these "special cases" may be the best thing for your club as you focus on fair and equal treatment of all employees.

5. Expect higher employee productivity -- and lower costs. A common complaint of employees in private clubs (as well as in other industries) is a lack of clear work objectives from management. Often employees simply don't know what is expected of them. Communicating specific expectations is critical to creating a productive dialog with employees and involving them in operational discussions.

In addition, it may be a good idea to simply raise performance expectations. In fact, behavioral research with groups has repeatedly shown that the mere expectation of better performance can produce dramatic and lasting improvements in actual performance. Simply asking more of your employees can reap good results, but only when management's appreciation of employee value is strong and clear.

None of this is to say that procedures, rules, and regulations are unnecessary. But the effectiveness of those controls is tempered by the loyalty of the people expected to apply them. Treat your employees with respect, encourage their involvement, reward them fairly, and expect more of them. Those are the human keys to cost control success.

Robert Salmore is a managing director with McGladrey & Pullen, LLP, the nation's seventh largest public accounting firm. Salmore is a senior member of the firm's Private Club Team serving more than 150 club clients throughout South Florida. He can be reached at 561/697-1785 and at [e-mail].