Bobby’s Burgers is a large restaurant chain that has nearly 10,000 units worldwide. They are experiencing incentive problems with their outlet managers. The managers are showing poor work ethic and are allowing their units to deteriorate in quality. CEO, Bobby Jones is considering offering a stock plan where each unit manager will receive 500 shares of stock in Bobby’s Burgers. He believes that this will motivate his managers. Is his logic sound?
Analysis
If I am critically evaluating the proposed stock plan, I am not sure if giving 500 shares of stock is necessarily the greatest idea to motivate your managers. In this case, the managers are being given the 500 shares as opposed to earning the 500 shares. Based on the information we have been given, the managers have done the exact opposite of earn the shares considering they are allowing their units quality to deteriorate. Rewarding them for their lack of effort may give them an even worse mindset than they already have. What is to stop them from thinking that they will continue to be rewarded for subpar performance? A better option would be to give them an opportunity to earn the shares as some kind of performance bonus. That way they will have truly earned it and performed their job better in the process. It would be a win for both sides. On the other hand, granting the stock options could potentially give the managers a better feeling of self worth. If they feel that they are part of something, they may be more inclined to want to do their jobs at the highest level possible (Brickley, Smith, & Zimmerman, 2009). Are there any other ways that Bobby could potentially motivate his managers to increase their efforts? Yes there are always different ways to motivate your employees. Instead of just giving them 500 stock shares in order to motivate them, Bobby could offer them performance incentives. If Bobby