Au Bon Pain Analysis

Motivation is defined as the processes that account for an individual’s intensity, direction and persistence of effort towards attaining a goal. This case is a study of Au Bon Pain a fast-casual bakery and café chain headquartered in Boston, Massachusetts during the 1980s when they were struggling and finding various obstacles in their day to day operations. One of the biggest hurdles they were facing was to keep their workforce motivated to provide high customer satisfaction which can sometimes be the game changer in service oriented fast food industry.

The case takes us to 1982 when Ron Shaich a 28-year-old Harvard business school graduate was made president, partner and chief of internal operations for this café. When Ron came on board company had issues revolving around high operating costs, customer dissatisfaction, operations losing money however the biggest and the most daunting of them all was how to keep the workers motivated. Schaich wanted to build a company where he would love to work and employees would constantly be motivated to treat customers well. This was not happening in the company and he realized he tried to address this issue by bringing new workers, managers and come up with a newly designed compensation plan which offered bonuses to managers based on their performance which was measured in terms of sales growth.

Time and again we saw that whenever the company faced motivation issues Schaich kept coming back to his bonus based compensation plan but that was not sufficient to resolve all issues. Workers and managers found ways to get around the performance requirements and were still able to get the desired pay. Compensation is a good tool to motivate people but it is not always a drive enough for workers to constantly do a good job. As per my recommendation Schaich needs to come up with a compensation plan which is enough so that the money issue can be taken off the table because as per the hierarchy of needs theory by Maslow unless the physiological and safety needs of workers are not satisfied there is no point in talking about the self-esteem and self – actualization needs.

The bonus structure not motivating workforce is a proof that sometimes the issues are more intrinsic and money cannot solve these problems. I think what was missing in the workforce was the need for achievement (nAch) and affiliation (nAff). This theory was developed by David McCelland and his associates. Need for achievement is the drive to excel, to achieve in a relationship to a set of standards. Au bon Pain is a bakery so the workers cannot have a great sense of achievement in the day to day work but the job can be challenging. A fast food café typically has a very high volume of customers during peak hours and mostly in the morning time. The customers are usually looking to grab breakfast or coffee on the way to their work. If the workers are motivated and intend to make the customer happy it will go a long way in making sure that customer has a good day overall. Nobody wants to start their day on a bad note and the workers should be educated with these facts. Even though they are making a coffee or breakfast for someone they can take some pride in the work they do. Sometimes these thoughts of achievements motivate individuals if they feel what they are doing holds some value.

In the case, we saw that when the company grew from 3 stores to 14 stores Schaic’s management style of working very closely with his managers was not a viable management style since he could not spend enough time with his managers. Now Schaic brought in a new person from McDonalds as the VP of operations. Need for affiliation is the desire for friendly and close interpersonal relationships. The managers and workers in the company were used to Schaic’s style of working but the new VP did not fully understand the work culture at Au Bon Pain and did not work on creating relationships with his managers. The case mentions that his management style was downwards and there were instances where he would hire his colleagues from McDonalds at higher salaries than the people already working with the firm. Per the equity theory, employee compares their outcomes by input ratio to others doing the same job. If the ratio is equals in comparison, then a state of equity exists and the situation seems fair. With the hire of new managers with higher salary the state of inequity occurred, because of which employees left the job. This affected the morale of existing employees leading to increased employee turnover rate. It also created rift between employees and the VP and eventually demotivated the employees. The average stay for workers went down from 1 year to 7 months. The recommended approach for the new VP would have been to first understand the culture at Au Bon Pain before making changes and hiring new people. High turnover and low public interest in employment within organization.