Profit-sharing has proven to be an
excellent retention tool for Pizza X. An
added monetary bonus provided to key
performers helps ensure that top talent
remains with the company.
So operations is mainly about people—that is, people
and systems. People make the systems, then people run
the systems in exchange for various rewards. How we set
up those rewards is crucial. The best thing we ever did
at Pizza X was make the 10 people on whom we count
to run our operations partners in our profits. We started
doing that as soon as we started making a profit in our
first store, 30 years ago. This is no contrived bonus for a
manager based on some subjective criteria. Our approach
to bonuses for managers comes down to one simple question: Does your store make money? If so, you keep 25%.
If the store loses money, the manager doesn’t have to pay
anything, but, interestingly, once one of our stores has
become profitable, it’s never been unprofitable again.
I like this system because it requires no real management, no fiddling. When we win, we win together. When
times get tough, they are tough on all of us, and we are
motivated to make things better. Who’s going to survive
a hard economic downturn? Will it be us, or will it be
our competitors who haven’t figured out how to put management and ownership on the same side? Our managers
like our bonus program because their bonuses don’t get
fiddled with, and they have significant control over the
money they make. They earn their own reward, and my
experience is that humans very much like some control
over their lives—and the more, the better!
Jeff Mease is the owner of Bloomington, Indiana-based Pizza X.