Lifelong learning, training and development, and corporate education all make claims that they contribute to both individual and organizational performance improvements. Using the structure of the Malcolm Baldridge National Quality Award, this paper explores how learning has indeed contributed to organizational performance excellence for one Baldridge award winner: Pal’s Sudden Service.
Pal’s Sudden Service
Pal’s Sudden Service is a quick service restaurant serving “primarily drive-through customers at 17 locations, all within 60 miles of Kingsport, Tenn., where its first restaurant opened in 1956” (National Institute of Standards and Technology, 2002, p. 1). Pal’s employs “465 people, 95 percent of whom are in direct production and service roles” (p. 1). In 2001, they became the first restaurant to receive a Malcolm Baldridge Quality Award. Pal’s continues to be the only restaurant to have ever won the Baldridge award, and they also are the proud recipients of two Tennessee Excellence Awards in 2001 and 2007 (Pal's Sudden Service, n.d.).
Organizational Performance Improvement
The Role of HRD in Improving Organizational Performance
In looking at learning’s role in organizational performance improvement, what have researchers found? The field of Human Resource Development (HRD) provides some insights. Swanson & Arnold (1996) define HRD as “a process of developing or unleashing human expertise through organization development and personnel training and development for the purpose of improving performance” (p. 16). They further argue, “when practiced in productive organizations, [HRD] should strive to contribute directly to the organization’s goals” (p. 16). Furthermore, Swanson & Arnold remind us that it is important to remember, “HRD is broader than training or adult education. There are HRD interventions that involve much more than training, and some (however rare) that might involve no training at all” (p. 16). What is needed is for HRD “to focus on systems and processes that ensure that individuals in the organization have the knowledge, expertise, and attitudes to produce quality” and deliver on the organization’s goals (p. 15).
At the same time, performance improvement for the sake of meeting organization goals should not be the only focus for HRD. Bierema (2000) argues that there is “value in striking a balance between organizational and individual goals… [and that] human values must be the starting point when considering workplace learning” (p. 279). Bierema further cautions us not to lose the human in Human Resource Development for the sake of improved organizational performance (and profits).
Baldridge Organizational Performance Excellence Goals
The performance excellence goals and criteria for the Malcolm Baldridge Quality Award offer a formalized program that defines, measures, and rewards organizations who exemplify the principles of an organization that is actively taking steps—and reaping the results of—being a high-performing organization. Three Baldridge criteria areas are particularly relevant to the subject of learning’s contribution to organizational performance: workforce engagement, workforce environment, and workforce-focused outcomes. Workforce engagement and workforce environment fall under the category of workforce focus; this category “addresses key workforce practices—those directed toward creating and maintaining a high-performance workplace and toward engaging your workforce to enable it and your organization to adapt to change and succeed” (Baldridge National Quality Program, 2008, p. 41). Within the category of workforce engagement are the aspects of a positive/supportive work environment, compensation and recognition linked to organizational goals (i.e., reward for performance), workforce satisfaction measurement, plus training and learning opportunities and systems. Additionally, workforce environment includes different methods for supporting the workforce such as learning and training development opportunities that are not strictly focused on employees’ job responsibilities. As Bierema (2000) recommends, this is how the more humanistic goals of lifelong learning and providing opportunities for individual improvement that do not focus strictly on job-related skills can be addressed.
The third Baldridge criterion relevant to the subject of learning’s contribution to organizational performance is the results category of workforce-focused outcomes. This set of criteria provides objective evaluation of the organization’s results and how those results support the achievement of the organization’s overall strategy. Per the Baldridge National Quality Program (2008), these criteria measure the effectiveness and outcomes of key indicators of workforce engagement and satisfaction (e.g., increased retention or promotions) and can also “include generic or organization-specific factors…you assess for determining your workforce engagement and climate,” e.g., turnover, satisfaction, and training opportunities (including retraining and cross training) (p. 46-47).
Learning’s Contributions to Organizational Performance Improvement at Pal’s
Pal’s aim is that to learning be pervasive throughout the organization, whereby training and development has been designed to “support improvement in operational and business performance” (National Institute of Standards and Technology, 2002, p. 2). “Employees at Pal’s are challenged to produce excellence in [their] operations…; to exhibit positive energy, well-being, and self-control; to make the right decision at the right time; and to be dedicated to continuous learning, development and growth” (Pal's Sudden Service, 2001, p. 20). Moreover, “organizational learning, employee development, and continually improving results are basic characteristics of the Pal’s culture” (p. 5).
Pal’s Approach to Training and Development
In staffing their human resource (HR) functions, Pal’s does not have professional HR staff. Instead, they rely upon clearly stated policies that operations staff and management use for all hiring, compensation, training, etc. decisions. This operations-drive approach also extends to who delivers their training. Pal’s does not rely on training instructors, but rather uses only operations personnel to lead their classroom training sessions. Senior leaders are involved in teaching classes and attending training sessions, which are considered by the organization to be an opportunity to “personally drive the Business Excellence Process” (Pal's Sudden Service, 2001, p. 8). Additionally, “owner/operators and assistant managers have primary responsibility for staff training” (National Institute of Standards and Technology, 2002, p. 3).
In the design and development of training, the leadership team annually assesses the organization’s training needs. This has resulted in the creation of a variety of training modules designed to meet Pal’s business needs. Following “a four-step model [of] show, do it, evaluate, and perform again,” Pal’s uses a combination of self-teach and classroom training modules (National Institute of Standards and Technology, 2002, p. 3). In stores, they utilize on-the-job training, “computer-based training, flash cards, and one-on-one coaching” (p. 3). In addition, much like other leading quick-service restaurants:
Visual standardization is a critical element of Pal's training and development program. We thoroughly train/coach our employees on our precise work procedures and process standards. This training focuses on developing a visual reference to verify product quality and usability. Operational procedures, service standards, and in-process control measures for all core processes, each product, and support services are carefully designed and documented in the Pal’s Operations Manual. (Pal's Sudden Service, 2001, p. 26)
Workforce Engagement
When looking at the criteria of workforce engagement, the Baldridge criteria (2008) asks the question, “How do you engage your workforce to achieve organizational and personal success?” (p. 42). Pal’s utilizes a number of techniques and programs to ensure a positive and supportive work environment, compensation and recognition linked to organizational goals, measurement of workforce satisfaction, plus ample training and learning opportunities. For example, “individual training and personal development plans are established for all employees at all levels to ensure that knowledge and skills required for defined responsibilities at each position are acquired” (Pal's Sudden Service, 2001, p. 22). Considered an important part of their Communication/Feedback process, organizational learning is a key tool for “quick deployment/sharing of the information/learning throughout Pal’s operations in all stores” (p. 8). This Communication/Feedback process is designed to take the output of the process’s inputs, analysis, and rapid prototyping, and share them across the stores. This process is also credited with encouraging “organizational agility and organizational and employee learning” (p. 8). In fact, Pal’s Communication/Feedback process “often produces rapid learning and decision-making that is shared company wide within the same day (or same hour)” (p. 20).
Feedback, coaching, and mentoring also play an important role in Pal’s workforce engagement. “Through training and coaching, [they] instill in [their] staff a positive, helpful, can-do focus on [their] customers, which also contributes to building good customer relationships” (Pal's Sudden Service, 2001, p. 14). “Feedback and coaching are provided by store owner/operators and assistant managers as appropriate to build customer service skills” (p. 14), thereby making “feedback, coaching, and reinforcement of applied knowledge and skills…natural parts of [Pal’s] work execution” (p. 22). Mentoring from owner/operators working directly with employees in the operations areas, “coupled with the developmental aspects of peer reviews and [Pal’s] training processes, effectively supports employees in developing and utilizing their full potential” (p. 21).
An intriguing reward and recognition program used by Pal’s is their “Caught Doing Good” (CDG) program. CDG has been designed to “provide an abundance of immediate, public, non-monetary recognition for staff contributions in support of employee development, customer satisfaction, continual improvement, and organizational learning” (Pal's Sudden Service, 2001, p. 21). To ensure the link between individual performance and organizational goals, “a special effort is made in CDG to identify behaviors that are consistent with [their] training programs and that are clearly linked to desired performance results” (p. 23).
Workforce Environment
When looking at the criteria of workforce environment, the Baldridge criteria (2008) asks the question, “How do you build an effective and supportive workforce environment?” (p. 43). In response, Pal’s utilizes a number of techniques and programs to support the workforce including learning and training development opportunities that are not strictly focused on job responsibilities. For example, Pal’s learning opportunities cover not only the skills needed to support operations, but also listening, health and safety, and organizational culture. For safety training, they have “adopted the National Restaurant Association’s ServSafe training and certification, an industry best practice for food safety education” (Pal's Sudden Service, 2001, p. 9). Additionally:
Pal’s frontline staff training program includes intense instruction on effective listening skills. These skills are not only critical for high performance on the food preparation line…but are also beneficial for gathering valuable customer information about needs, expectations, and satisfaction.” (p. 13)
Pal’s also strives to prepare their employees not only for their job at Pal’s, but beyond. They acknowledge, “Most of our employees’ ultimate careers are with other companies. Therefore, we strive to provide skills, knowledge, a principle-based mindset, and work habits required for producing excellence and practicing life-long learning” (Pal's Sudden Service, 2001, p. 21). Pal’s also extends its contributions to their communities believing that “a major responsibility to our local communities is the shaping of our employees into positive citizens. By helping our people grow, develop, and become better citizens, Pal’s helps make our business more successful while also making our communities a better place to live and work” (p. 10). This echoes Bierema’s recommendation that HRD needs to expand beyond just “performativity” and help contribute to social and political change.
Workforce-Focused Outcomes
As Swanson & Arnold (1996) argue, “performance takes place and can be measured at the organizational, process, and individual levels” (p. 15). When looking at the criteria of workforce environment, the Baldridge criteria (2008) asks the question, “What are your workforce-focused performance results?” (p. 46). To answer this question, Baldridge recommends measuring the effectiveness and outcomes of common indicators of workforce engagement and satisfaction (e.g., increased retention, promotions, turnover, satisfaction, and training opportunities (including retraining and cross training)).
Pal’s requires cross training “of all store-level staff to ensure their complete understanding of all production and service procedures as well as quality standards” (National Institute of Standards and Technology, 2002, p. 3). Specifically, cross-training is used so that “staff members have a complete understanding of all production and service procedures and quality standards to allow smooth transition from work station to work station and cooperative, flexible responses to volume cycles and unplanned reassignments” (Pal's Sudden Service, 2001, p. 20).
Pal’s measures their organizational performance with their SysDine management information system, which is also used to analyze operations for a company-wide balanced scorecard. Some important workforce indicators of Pal’s success include the following:
1. “Pal’s leads the industry in low staff turnover. The industry annual average in our market is over 300 percent while Pal’s turnover rate for 2000 was 127 percent” (Pal's Sudden Service, 2001, p. 24).
2. Pal’s “group of store operators and senior leaders has lost only three individuals in the last twenty years, which gives [them] a major advantage in leadership continuity over [their] competitors” (p. 31).
3. Employee satisfaction surveys reveal steady improvement in the period from 1995-2001 with all categories (communication, training, motivation, excitement, harmony, and management’s ability) rated a 4.12 or higher on a 5-point scale (p. 31).
Operationally, Pal’s has also seen the following performance improvements resulting from their learning programs:
1. Staff productivity and sales per labor hour have been on an “improving productivity trend [reflecting] the effectiveness of [their] selection, hiring, training, and work designs” (p. 31).
2. “Over the past several years both the timeliness and satisfaction of complaint handling have been improved through training and by empowering the staff to instantly resolve complaints” (p. 15).
3. “On-the-job injury/accident claims [at Pal’s] have declined seventy-five percent since 1992” (p. 23).
Looking to the future and continuing to ensure sustained results, Pal’s also utilizes benchmarking to “determine best-of-class practices and performance and to set stretch goals to reach and exceed best-of-class performance levels” (Pal's Sudden Service, 2001, p. 17). “After [they] have analyzed and learned as much as possible from [their] benchmarking partner’s processes and performance data, [Pal’s uses their] Plan-Do-Study-Act (PDSA) piloting and continual improvement approach to incorporate any learning [they] gain into [their] own processes to produce equal or better results” (p. 17).
Conclusion
Through a focus on workforce engagement and environment, Pal’s has experienced significant positive and measurable workforce-focused performance results. The quick-service channel in particular faces many challenges—a dwindling labor pool, increased cost of raw products, pressures from customers to provide variety and keep prices low, and an increasingly health-conscious public. Despite this, Pal’s has been able to create a workplace that has the lowest turnover in the industry (for both their front-line and management employees) and some of the best results on key operational measures such as sales per labor hour, order accuracy, and time spent in drive-through.
References
Baldridge National Quality Program. (2008). Criteria for Performance Excellence Retrieved April 11, 2008, from http://www.quality.nist.gov/PDF_files/ 2008_Business_Nonprofit_Criteria.pdf
Bierema, L. (2000). Moving beyond performance paradigms in human resource development. In A. L. Wilson & E. R. Hayes (Eds.), Handbook of adult and continuing education (pp. 278-293). San Francisco: Jossey-Bass.
National Institute of Standards and Technology. (2002). Pal's Sudden Service. In Baldridge Award Recipient Profile. Retrieved April 11, 2008 from http://www.nist.gov/ public_affairs/pals.htm
Pal's Sudden Service. (2001). 2001 Malcolm Baldridge National Quality Award Application Summary Retrieved April 11, 2008, from http://www.quality.nist.gov/PDF_files/ Pals_Application_Summary.pdf
Pal's Sudden Service. (n.d.). Pal's News. Retrieved April 16, 2008 from http://www.palsweb.com/news.htm
Swanson, R. A., & Arnold, D. E. (1996). The purpose of human resource development is to improve organizational performance. New Directions for Adult and Continuing Education,(72), 13-19.
- Robin
Copyright Robin Donnan 2008. All Rights Reserved.
http://www.perfassocinc.com
