Castle's Family Restaurant Case Study

Executive Summary:

Castle’s Family Restaurant is a small chain of restaurants owned and operated by the fourth (4th) generation, of predecessor’s. The company is based in northern California and operates a chain, of eight restaurants. Due to the growing industry and, demand for more business, Castle Family Restaurant is finding it extremely difficult to maintain its daily operations and remain one of the top company’s, in the area.

With the operation of eight restaurants Mr. Morgan must research and compile a list of innovative ideas to help the company grow the business, better manage employees, and expand the resources based, on industry demand. Through his research Mr. Morgan has shown an interest in a new HRIS system; the installation

and implantation of the new system would allow him (as operations Manager) to manage the business from, a single location.
The HRIS system would allow Mr. Morgan to standardize employee information, payroll, training, scheduling and inventory. Currently he travels to each of the restaurants on a daily basis; implementing a new HRIS system would yield a cost savings of, 30 percent annually.

Introduction:

Mr. Morgan has agreed to a meeting with our company (Kronos Workforce Ready) to evaluate his current Operating System and how our company can improve his business with, an HRIS system. Upon reviewing the current installation we’ve found that his company is using programs that have been outdated for, at least 10 years. Some of the software that’s in place is Microsoft Excel Spreadsheets for payroll and, an Access database for employee information as well as, product inventory control (i.e. meats, produce and dairy). A further review has shown that none of the above programs are centralized; which drives the fact that he has to travel to each restaurant to collect data on a weekly basis.

Review:

Bert Castle opened his first restaurant in 1942 during World War II and War Bonds were introduced. Castle opened the restaurant because he wanted to keep family values alive even when the men were at war. They specialize in a laid back family atmosphere where all the locals come to dine. Bert Castle wanted to provide a deep and enriching family atmosphere with a down home touch with foods to warm the body and soul of every patron. Driven by an improving economy, Castle’s has had 11.7% profit growth in the past 3 years and has opened two additional restaurants in the past 2 years. Castle’s restaurants are a profitable business because everyone loves to go out to eat where the price fits their budget. With the restaurant industry sales are expected to hit a record high of $709.2 billion in 2015 as stated by The National Restaurant Association and with cutting cost they would like to expand into the mid-west region, like Chicago, IL and Milwaukee, WI. . In order to expand in a different region Castle’s Family restaurant needs to employ a MIS system such as Simplypersonnel.
Business Analysis:
Upon analysis of the current system we have found that using Excel prevents Mr.

Morgan from obtaining the latest data, as needed. He often finds it difficult to keep track of payroll; employees have difficulty logging hours which sometimes causes payroll checks, to be incorrect. As a result, his turnover rates are high, at any given time. Most of the restaurants are “more often” depleting produce much sooner than anticipated. This has, “on occasion”, resulted in restaurants closing before the times that are outlined at the entrance, of the facility.

Having a web-based system in tact will provide stability in payroll processes and provide the reporting information needed to move forward in the decision making practices. This analysis will concentrate on aspects of the payroll activities and the current risks associated with these

methods.
Understanding that “payroll involves calculating time cards, retroactive pay, commissions, bonuses, severance pay, overtime, salaries, wages, employee reimbursements, holiday pay and benefit time such as vacation, sick and personal days. Payroll also makes deductions from employees’ wages for taxes, wage garnishment, health and life insurance, flexible spending accounts and retirement investments while having a solid understanding of federal, state and local wage and hour and employment tax laws”(Ferguson & Demand Media, 2015), employment laws need to be studied and changes need to be adhered to constantly. While employing 300 - 340 employees, both full and part-time, there are wage and reporting requirements that you must follow when paying tipped employees. We have found through analysis that gratuities in an employee’s paycheck means wages may be calculated incorrectly, leaving employers vulnerable to lawsuits from employees and audits from the U.S. Department of Labor. Having a good understanding of these processes is time consuming and will continue to demand more time and expenses as the business goes nationwide.
Addressing the risk and time associated with maintaining the needed documentation for each of the employees is critical to the continuing success of Castle’s Family Restaurant.
Collecting data for payroll practices include time tracking, scheduling, and time off for vacation and personal days. Mr. Morgan is responsible for all aspects associated with this data scheduling and collection including data entry into the appropriate systems. In the current system, Castle’s employees arrive to their job site as scheduled and punch in utilizing a time clock located by the back door in the kitchen. At the appropriate time, this information is collected by Mr. Morgan, who carries that information back to his office and enters the data into an Excel spreadsheet, which does the calculations. That data is then transferred into different software, which prints the payroll checks. The checks are signed, put into envelopes and distributed to the eight locations. Employee no shows are documented by the restaurant manager and replacements are found to accommodate missing personnel.
There are several potential risks as they relate to these payroll procedures. The first is the human error while entering data into Excel. With the amount of information that is manually entered and the different job costs, (i.e. Cooks, servers, bus persons, bartenders), there is a risk that errors can be made and the paychecks are all wrong. Having to correct that type of an error, cost the organization money, along with time and resources. It also affects the employee both financially and emotionally reducing their confidence in the business.
Employee turn- over rate is another risk for the organization with limited scheduling resources. The time and resources spent on replacing a staff member during business hours is costly and can impact both customer and employee morale. These situations, which can be unavoidable at times, but will impact the organization’s mission to provide quality service to their customer base. Having a system, which is accessible to employees after hours, allows the employee to find a replacement and make the necessary modifications. This solution would help reduce risk factors associated with employees quitting or not showing up for their scheduled shifts and enforce employee empowerment, which builds morale. We are suggesting that Mr. Morgan chooses to use Kronos Workforce Ready for his MIS system so that we can help remove these common errors that would make Castle’s Restaurants run more efficiently and save the business time and money so that Mr. Morgan can concentrate on more pertinent duties. Let’s look at why Mr. Morgan should choose Kronos Workforce Ready over another company for his business solutions.
HRIS Type Comparison:
The first system I have researched is The Kronos Workforce Ready system and I have found that it has everything that Mr.

Morgan is looking for and how it will have a profound effect on his daily business routine. This type of HRIS payroll system that I am going to discuss is the Kronos system and how it can enhance Castle’s Family restaurant by allowing the business to gain a comprehensive advantage by automating the necessary and often demanding business process with precise, real-time employee data. With Kronos intact Mr. Morgan will be able to have accurate timecard management, manage quick changes when an employee cannot come in to work their scheduled shift, build and manage schedules while staying within budget, all while having enough coverage for the rush hours. In which he currently has to rely on phone calls and text messages to stay up to date while traveling to the eight locations to get time off request, vacations and shift

changes.
Which brings us to payroll, Mr. Morgan is using an outdated Excel system in which if a calculation or formula is entered in wrong due to human error then it can make for a detrimental issue in completing a payroll check. In order to prevent errors like this from occurring by using Kronos it simplifies the whole payroll process by continuously updating in real time and calculating the precise taxes all while having the benefit of being self-service to the employees so that they can manage payment preferences and view pay statements in advance and if they need to make corrections on their time entry before approving their own hours before the time cards are sent to payroll to be verified. With using this system direct deposit would also be offered, freeing up travel time for Mr. Morgan and cost savings for the company by not wasting money on paper checks.
This brings us to Kronos is a completely mobile solution it can be accessed through any mobile device, (i.e. Apple, iPhone, Windows Mobile, and Android) making it easier for Mr. Morgan to log in no matter where he is.
Mr. Morgan can also manage his inventory needs by creating a reports document in Kronos that will let his eight managers at different locations do an inventory count and send the information directly to the report document so he can manage and order what items are needed at each location without leaving his office.
The second system I researched is QuickBooks Inventory Management which is a good system for a very small mom and pop business that averages 10 – 15 employees. QuickBooks does offer accounting tools such as payroll and paper printed checks similar to Excel. It is well used for salary employees where the pay does not change nor do the taxes for individuals. It is a pretty basic system that would not handle the multitude of calculating the different types of taxes for the servers in a restaurant atmosphere. The software would then have to be installed on all the computers in every location that would in turn cost Castle’s Family restaurant more money and would not be cost efficient. I did find that it is very good at managing inventory across multiple locations it has the ability to receive, control, distribute and track the usage of products that are used. With advance preorder capabilities the orders will always be accurate. This would be an essential thing for Mr. Morgan to have, to help him in keeping the restaurants fully stocked at all times and not have to turn customers away because they ran out of one item or another.
Having provided Mr. Morgan with the comparisons of these two HRIS systems with listing the pros and cons of each one, we will now discuss my recommendation of his best choice to fit all of his needs in turn saving the business money.