Sysdine People Resource Management Software

Pal’s Sudden Service

Sysdine People Resource Management Software

Published: June 2005

Pal’s Sudden Service developed extraordinarilyeffective people resource management processes, which in turn produced extraordinary results in growth, customer satisfaction, productivity, and turnover reduction. These processes are now incorporated in a software system called Sysdine®, which utilizes Microsoft® Visual FoxPro®and Microsoft SQL Server™. Pal’s is the only restaurant company ever to win the Malcolm Baldrige National Quality Award.

Situation

Pal's Sudden Service is a quick-service restaurant chain with 19 locations, all within a 60-mile radius of Kingsport, Tennessee. Pal’s provides drive-through service and it competes directly with national fast-food chains.

During the mid-1990s, Pal’s made a decision that it would reorganize its operations in ways that would permit it to achieve extraordinary levels of performance excellence. A key to this, Pal’s CEO Thom Crosby felt, was the fact that a company's employees—their abilities, their competencies, and their attitudes—are the main determinants of virtually every performance measurement within an organization, from market share, customer satisfaction, productivity, and quality, to operating profitability and growth.

Pal’s realized that it faced especially formidable challenges in building and maintaining the most effective workforce possible, that is,its “people resources.” These challenges include determining:

• Which members of the applicant pool are best suited for hiring?
• How can each employee’s areas of strengths and weaknesses be identified and optimized?
• How should training activities and certification events be scheduled, launched, and tracked?
• How should training content be created, maintained, and deployed?
• How can employee turnover best be minimized?
• How can employee performance best be maximized?

Employee turnover was an especially critical problem. At that time, Pal’s annual turnover was at 212 percent, which was and is typical for its industry. Turnover affects virtually all areas of a company’s performance. Bad experiences can occur when customers encounter inexperienced employees. As a result, core customers can reduce their visit frequency and lower their average check size. Sales growth, volume per store, and market share can suffer as a result.

Constant churning of the workforce tears apart the fabric of teamwork, thus damaging productivity and effectiveness. High turnover means that managers and supervisors must spend an inordinate amount of time in interviewing, hiring, and training new employees, rather than spending that time in working with customers and in making the operations of the business function more effectively.

Solution

Pal’s believed that an array of powerful tools and processes should be directed toward enhancing the abilities, competencies, and attitudes of its people resources. Crosby and his team thus began researching, designing, deploying, and honing several people resource management processes.

In 1998, these processes were ready to be placed into a software system. Pal’s began working with the Silver Creek Technologies development team for this purpose. That system came to be called Sysdine®.

After years of honing and enhancement with Pal’s, Sysdine was converted to a Web-based, Microsoft®SQL Server™–based system in late 2004 (part of Microsoft Windows Server System™ integrated server software), at which time its national marketing was launched.

The development team’s tool of choice was Microsoft Visual FoxPro® database development system. Recalls Lead Sysdine DeveloperGene Maddox, “The design and construction of Sysdine presented extraordinary challenges to our group. Sysdine’s functionality was to be wide-ranging, and encompassed virtually every area relating to the management of a company’s people resources. Its underlying data structures and business logic were complex, but it had to provide to its users a productive and easy-to-grasp interface. It had to be flexible and able to adapt to the requirements of the many diverse types of operations within a multitude of industries. And it had to be developed within the confines of a schedule and budget. Visual FoxPro was a natural for Sysdine, and it helped us to succeed in each and every project area.”

“Visual FoxPro 9.0 will be a godsend for future development,” Maddoxcontinues. “We’ll be adding a continuing stream of improvements to Sysdine, to better serve our customers and to stay ahead of our competitors. Also, we’re finding that many customers want us to provide customization service, to make Sysdine fit their operations even more tightly. So our developers will have to be more effective and productive than ever before. Visual FoxPro’s new tools will help us to accomplish this.”

Sysdine is a framework of tools, methods, and services for the building and managing of people resources by:

•Acquiring people through effective hiring.

•Retaining people by reducing turnover.

•Nurturing people through learning, testing, and feedback.

•Orchestrating people by fostering teamwork.

•Managing the processes by which people resources are built.

Sysdine is designed for use across a variety of industries with hourlybased, turnover-prone workforces. Three tools in particular have played key roles in Pal’s success:

•Values-based hiring.

•Peer reviews.

•Training andtracking.

To help address the turnover issue, Pal’s worked with a distinguished professor of psychology at a nearby university to develop what came to be called “values-based hiring.” The values-based hiring system is a preemployment testing tool designed to help managers make better hiring decisions.

An applicant takes an “attitude survey” that consists of 60 questions. The attitude survey assesses the applicant’s attitude in each of the following areas: control,self-esteem,confidence,commitment,trust,work values,optimism,communication,motivation, and openness.

When the applicant has completed the attitude survey, it is graded and evaluated automatically by Sysdine. The manager then receives a fast, concise, and easy-to-digest one-page summary of the results. Based on the applicant’s responses, Sysdine suggests follow-up questions for the manager to include as part of the interview process.

This information can help to result in new hires who are less prone to leave, more likely to become productive quickly, more apt to fit into the company culture and be satisfied in their jobs, and more likely to be capable of developing into world-class employees.

Pal’s CEO Thom Crosby considers peer reviews to be the most important single tool used at Pal’s for the building of a world-class workforce. Under Sysdine's peer review system, all employees rate themselves and each of their peers as to the job areas that are proceeding satisfactorily and those that are in need of improvement. The ratings are recorded on a structured, but anonymous, basis. Sysdine summarizes and averages the ratings for each employee in each performance area.

The manager then conducts an individualized performance review session, in which each employee compares their own ratings of themselves in each area to the ratings their peers have provided. During this discussion, gaps are identified between self-ratings and peerratings, along with an identification of which factors need improvement. A personal development plan for the employee is then prepared and followed.

This process has proven to motivate employees to rapidly improve and direct the improvement efforts toward those areas with the highest potential payoff, and it has enabled employees to grow in ways that delight the customer and provide for personal growth and development.

Sysdine can use peer-review results, plus employee longevity, to continually and automatically recalibrate values-based hiring profiles to a company’s own workforce, culture, geography, and industry. Sysdine can recalibrate, for each company, such areas as: What are the key factors in predicting longevity and performance? What are the survey scores for the average long-term employee and the average short-term employee? What are the survey scores for the average high-tier performer, the average mid-tier performer, and the average low-tier performer?

Employee training, and the tracking of that training, has played a crucial role in Pal’s success. Within Sysdine, managers can define the requirements for certification or qualification on a particular job or workstation. These requirements may include specified tutorials, flash cards, exam scores, management observations, outside training and testing events, and other requirements. The requirements and frequencies for recertification can be defined as well.

With these specifications in place, Sysdine is able to automatically schedule, launch, and track each required training event for each employee, thus saving time for the location manager or department manager. Then, Sysdine can record each event as it actually takes place. This helps guarantee that learning events that should occur are indeed scheduled, assurance that nothing slips between the cracks, and provides savings in management and administrative time.

The presenting of training and testing materials in an effective manner, to a workforce that may include members who are young and transitory, is a critical challenge. Sysdine uses innovative techniques to focus the employee’s attention on the materials at hand, thus increasing comprehension and retention.

Sysdine provides new types of performance metrics and actionable information throughout each area of people resource management. It enables new types of people resource management accountabilities to be established, and new types of critical insights to be derived, thus increasing the chances of success within an organization’s people resource management processes.

Because of their importance to a company’s success, training and development events are treated by Sysdine as items that, when scheduled, are expected to occur. When they do not occur in accordance with expectations, exception reports are produced for management.

The reports summarize these events, and treat them in the same manner as, for example, variances in materials utilization or labor utilization within an operation. More detailed reports can provide the questions for a manager to ask to determine why such variances occurred.

How much time within the company is being devoted to training? How is this time being allocated among the various areas of study and testing? And does this allocation need to be adjusted to better direct it toward the company’s priorities? Sysdine provides the information to use in making such determinations.

And because Sysdine maintains detailed records of all training-related activities, it can help to reduce the risks associated with litigation due to alleged damage to consumers or others, violations of government regulations and laws, claims for employee injury and other workplace issues, and nonconformance with operating policies and procedures.

Sysdine contains other people resource management tools as well. For each employee, Sysdine can track such information as background checks, attendance, corrective actions, and safety incidents.

Sysdine provides a powerful and full-featured workforce scheduling module. Sysdine Scheduling is fast, graphical, and intuitive, and permits schedules to be built quickly and changed as circumstances require.

Sysdine can organize and provide quick online access to information such as policy manuals, procedure manuals, and other reference materials. Sysdine also permits standardized paper forms, such as employment applications or tax forms, to be stored, deployed in PDF format, and printed at each location.

Sysdine permits information to be gathered and recorded each time an employee leaves the company. This information can then be analyzed by Sysdine to provide insights as to why turnover is occurring.

Benefits

Thom Crosby notes, “By using Sysdine in our operation, we saved more than [U.S.]$1 million in employee training costs, we cut our turnover rate to half that of our best competitor, and we raised our productivity levels substantially.” QSR Magazine noted that Sysdine “helped this small chain become a pillar of management success.” Convenience Store Decisions Magazine stated in March 2005 that “The Sysdine People Resource Management software helped Pal’s win a coveted Malcolm Baldrige National Quality Award.”

QSR Magazine noted "When you find a place like Kingsport, Tennessee–based Pal's Sudden Service—where order errors are tracking one per every 3,300 orders, where employee retention levels are high enough to be considered an anomaly, and where food gets out of the pickup window in 20 seconds, on the average—it's worth taking a closer look." These results include the following.

Pal’s employee turnover rate is now at 56 percent, versus an industry average in excess of 200 percent. If Pal’s turnover rate last year had been the same as before it began using Sysdine’s values-based hiring and peer reviews, its 19 locations would have had to hire and train over 1,200 additional people. The profit impact of this additional turnover would have been nearly $3 million.

Pal’s customer satisfaction ratings are at 99 percent, versus an industry average of 71 percent. Pal’s state health inspection scores are in the 98 percent range, while its best competitor averages 80 to 85 percent. Pal’s average order handout speed of 20 seconds is far below its best competitor’s 80 seconds. Pal’s order error rate is at one per every 3,360 transactions, with the new goal being one per each 5,000 transaction.

Perhaps even more impressive and important is the fact that these results have led Pal's to double-digit growth in same-store sales, sustained over the years, and to a multidigit advantage in net profit margin over its best competitor. Its annual volume per store is averaging far above the typical level for a drive-through operation.

Each year, the President of the United States presents the Malcolm Baldrige National Quality Award to a small number of businesses and other organizations. The award, established by Congress in 1987, is the nation’s highest honor for management excellence.

In 2001, Pal's Sudden Service became the first, and to date the only, company in the restaurant industry to win the Baldrige Award. President Bush presented the award to the Pal’s team in March 2002. Sysdine received its own accolade in 2003, when it won the QSR Magazine Applied Technology Award.

The Baldrige win, coupled with unheard-of results, have propelled Pal’s Sudden Service to high-profile status within its industry. It has reaped a public relations bonanza, both in the trade press and in the general media within its operating region. Pal's CEO Tom Crosby has become a fixture on the lecture circuit, speaking to industry groups such as the National Restaurant Association, DineAmerica, quality associations, and high-profile organizations such as the Mayo Clinic.

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For more information about Sysdine® People Resource Management software, contact Silver Creek Technologies, LLC at (800) 708-2796, or visit the Web site at:

For more information about Pal’s Sudden Service, visit the Web site at:

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