Capstone Project: Calveta Dining Services: A Plan for Change

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Calveta Dining Services: A Plan for Change

Calveta Dining Services:

A Plan for Change

(Company)

Calveta Dining Services is a company that has experienced tremendous growth due, in part, to the company's five core values known as "Antonio's Way." Since Antonio's retirement, the company has been experiencing issues that are stunting the company's growth. Among these issues is the loss of customer accounts. Retaining customers is essential to the company's success. Account retention was never a problem in the past, and the company is trying to find a way to balance their aggressive employee advancement program with the needs of their customers.

Calveta Dining Services:

A Plan for Change

Summary of Decision Situation

Calveta Dining Services is a profitable company. However, they have some issues that are affecting business. Calveta is a family owned, profitable food service company that provides meals to Senior Living Facilities. They have a strong company culture that focuses heavily on promoting from within. The company is dedicated to service, innovation, and profitable growth.

Identification of the Issue

One problem facing Calveta is the loss of customer accounts. In previous years, this had not been an issue. However, lately, accounts have been lost primarily due to the change in Account managers. Since Calveta prides itself on being customer-oriented, losing these accounts is a blow to their core values. Calveta would like to retain their accounts and add new ones.

Calveta strongly believes in developing its employees and grooming them for promotion. Their interviewing process helps them determine not only the most qualified candidates, but those with ambition and growth potential. However, promoting account managers results in the customer losing their main point of contact with Calveta. The customers want to keep the same account manager, but the company wants to promote them. This is a struggle for the company. Calveta needs to find a way to fill the employees' motivational needs and fulfill the needs of the customers as well.

Theory One and Review

One theory is that performance is a function of ability and motivation. Employee effort will lead to performance, and performance will lead to rewards (Vroom, 1964) Under this theory, rewards can be both positive and negative. A positive reward will lead to the employee feeling more motivated. Conversely, a negative reward will lead to an unmotivated employee. Victor Vroom developed an expectancy theory in the 1906's. His theory outlined four assumptions. One assumption is that when people join an organization, they have expectations about their needs, motivations, and past experiences. These expectations affect how the employees react to the organization. (Luneneburg, 2011) The second assumption under Vroom's theory is that individuals behave according to conscious choice. The third assumption is that people have different ideas about what they want from an organization. The fourth assumption is that employees will choose among different alternatives and pick the one that offers them the greatest personal benefit. (Luneneburg, 2011) Motivated employees are more productive, providing benefit to the company. (Lindner, 1998)

Vroom developed an expectancy theory based on his four assumptions. The expectancy theory states that effort leads to expectancy which leads to performance. Performance will lead to instrumentality, which is the assumption that performance will be rewarded. (Luneneburg, 2011) Different rewards will appeal to different employees. Valence is the term used to indicate the strength of the employee's preference for a particular reward. If obtaining the reward is highly attractive to the employee, valence is high. If the employee is indifferent to obtaining the reward, valence is zero. Vroom's expectancy theory states that a relationship between motivation, expectancy, instrumentality, and valence. Motivation is equal to expectancy multiplied by instrumentality multiplied by valence. (Luneneburg, 2011)

Vroom's expectancy theory offers insight for managers on how to motivate employees. This theory assumes that people enter an organization with preconceived ideas of what they hope to achieve. They also exercise free will in choosing their behaviors. Finally, the value of the potential reward is a deciding factor in how the employee will behave. In the case of Calveta, employees are offered promotions as a reward for hard work and dedication. The promotions are attractive due to the generous bonus structure. Manager bonuses account for 60% of their salary in some cases. Underachievement is not tolerated by the company, so advancement is all but expected.

Theory Two and Review

Another theory about employee motivation was developed by Abraham Maslow. He contended that employees have five levels of needs: physiological, safety, social, ego, and self- actualizing. The needs are ranked in a pyramid shape with physiological needs at the lowest level followed by safety, social, ego, and finally self-actualization at the top. (Maslow, 1943) Under this theory, lower level needs have to be satisfied first. (Luneneburg, 2011) Maslow's hierarchy of needs is represented in Figure 1.

Maslow believed that all people are capable of self-actualization. He identified several characteristics of self-actualized individuals. They include: the ability to tolerate uncertainty, accepting themselves and other for what they are, spontaneity in thoughts or actions, having an unusual sense of humor, and being highly creative. (McLeod, 2007) Maslow further identified certain behaviors which lead to self-actualization. These include: trying new things, being honest, experiencing life like a child, listening to one's inner voice and feelings, taking responsibility, and working hard. (McLeod, 2007)

Based on Maslow's hierarchy, Calveta is meeting the majority of their employee's needs. Physiological needs are met outside the workplace. The safety needs include employment and security. Calveta has a low turnover rate, which in indicative of employment security. Belonging needs are met with the company's family-type atmosphere. Esteem needs are being met with growth, support, and encouragement to succeed. It is unclear how many of the employees have achieved self-actualization under Maslow's theory.

Theory Three and Review

Psychologist Frederick Herzberg also proposed a theory concerning employee motivation needs. Under Herzberg's theory, factors such as company policy, supervision, interpersonal relations, working conditions, and salary are hygiene factors, not motivators. Herzberg stated that the presence of these hygiene factors does not motivate an employee or create job satisfaction. However, the absence of these factors can create job dissatisfaction. (Gawel, 1997) Herzberg found that five factors could determine job satisfaction, achievement, recognition, the work itself, responsibility, and advancement. (Gawel, 1997) He referred to these motivators as satisfiers and believed that they enriched a person's job. Satisfiers had a long-term positive effect on job performance. Hygiene factors, or dis-satisfiers, resulted in only short-term changes in job attitudes and performance. The short-term changes quickly returned to their previous levels. (Gawel, 1997) In short, satisfaction causes performance. (Smith, 2008)

Calveta Dining is providing the majority of these satisfiers. The company pushes employees to achieve. Recognition is a part of the company's HR program which emphasizes constant feedback and training programs. Their motto is, "Keep them learning. Keep them growing." Advancement is commonplace in the organization. These factors did have a positive effect on job satisfaction as indicated in the employee survey. Ninety percent of the respondents reported being satisfied or very satisfied as an employee of the organization.

Theory Four and Review

Lyman Porter and Edward Lawler developed their own theory on the relationships between employees and organizations. Porter and Lawler started with Vroom's expectancy theory and expanded upon it. They developed their own model, which considered variables such as effort, performance, and satisfaction. (Luthans, 2010) They believed that Vroom's theory about employee rewards was correct but incomplete.

Porter and Lawler divided rewards into two categories, intrinsic and extrinsic. (Porter, 1968) Intrinsic motivation is internal and included people performing a task simply because they enjoy it. Extrinsic motivators are external and come from a reward such as a pay increase, bonus, or promotion. (Gagne, 2005) Porter and Lawler surmised that job satisfaction came from earning both intrinsic and extrinsic rewards. They were proponents of structuring the work environment so that performance would be rewarded both intrinsically and extrinsically. (Gagne, 2005) The theory states that making a job more interesting and having rewards, such as raises, contingent upon work performance, would lead to higher job satisfaction. Intrinsic and Extrinsic motivators are additive, meaning the combination of both leads to overall satisfaction. (Gagne, 2005) However, it should be noted that when awards were given without expectation, they had little effect on employee performance. (Cameron, 2002)

Under Porter and Lawler's theory, Calveta Dining offers many extrinsic rewards. It is not clear if the company is offering intrinsic rewards. Employees frequently move from one position to another. This is due to the company's rigorous advancement program. The employees are encouraged to ascend to new positions and take on new roles and responsibilities. Not staying in one position for a long period of time can have an effect on intrinsic rewards.

Theory Five and Review

David J. Cherrington also studied the effects of rewards on employee behaviors. Organizations often struggle with concerns regarding performance standards and rewards. Expanding upon Porter and Lawler's theory, Cherrington concluded that a reward system must be contingent upon the employee's performance. Only then could performance be… [END OF PREVIEW]

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