Applebees’ Reduces Turnover Using Metrics, Accountability, and Rewards

In today’s Wall Street Journal, there is a column on Applebees’ and how the restaurant chain reduces employee turnover. I found a closely related article in workforce.com

According to the articles, Applebees’ uses a combination of good metrics, accountability, and rewards to keep turnover low.

The first key to their turnover reduction success is metrics, which includes a ranking of all employees. This ranking of employees requires that 20% of employees are rated “A” players; 60% are rated “B” players; and 20% are rated “C” players. The goal is to focus on retaining the A and B players.

The second “key” is to make managers accountable for focusing on retaining the A and B players. This is based on an assumption that losing an A or B player costs the company money; losing a C player however means a gain for the company!

The third “key” is to reward managers for effectively retaining the A and B players. Managers use a variety of motivational tools towards this end, including prizes, small raises, special pins, and other incentives.

According to the Wall Street Journal article, turnover went from 146% in 2000 to 84% in 2004. If you are wondering whether turnover rates of 146% are impossible, the article states that turnover rates can be as high as 200% in restaurants, which means the average worker leaves after six months!

I believe that using ranking, accountability, and rewarding managers for doing the right things can be a powerful combination and highly effective. More companies should adopt this approach!

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1 Comment

  1. Bill Hixon

    Thanks, this was very interesting and I hope they are successful with this. The problem with this, and most management programs is ACCOUNTABILITY. It must be built in and objective.

    Thanks again!

    Bill Hixon

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