Jack in the Box Links Engagement to Profits
Jack in the Box Inc. has conducted annual employee surveys for nearly two decades, following the familiar cycle of conducting a survey each year, summarizing and sharing the results with the organization. Mark Blankenship, the company’s SVP and Chief Administrative Officer, arrived to find that the company ascribed to the service profit chain model* for operating its restaurants. The concept at the heart of this model is that if restaurant managers excel at hiring the right employees, those hires will provide superior service to guests, resulting in happier (and loyal) guests, who would then be more loyal to the brand. This idea of hiring the right employees, treating them well, training consistently and paying above average—all of which leads to high levels of customer service, loyalty and retention—was, as Blankenship wrote in HR Magazine, “ … the belief system or logic chain. We put language to that effect in our annual reports” (2012).
HR measured employee satisfaction and engagement through the annual survey and “demonstrated relationships between satisfaction with the boss, benefits, training, turnover and so forth, but that's where HR's analytical connection to the business stopped,” says Blankenship, who was intrigued that HR professionals did not engage in connecting the "people" data to the financial and operational data, nor did leaders in finance and operations express interest in that same people data as an integral, strategic element of their analytical work. “After all,” says Blankenship, “they measure every aspect of restaurant and business performance.”
Blankenship moved to assemble the restaurant performance data and connect the organization’s people metrics and business performance, the beginnings of what became “a strategic shift in decision-making," Blankenship says. The data told a story—restaurants staffed by happier employees had happier guests and correspondingly higher sales and profits. “We learned that the manager controlled much of what we saw as employee satisfaction but that ‘happy employees’ were only part of the equation that led to our current ‘people equity scorecard.’”
The organization began to change the way business was discussed—based on the data and process—and they added quarterly internal service surveys to follow-up the annual survey. The quarterly surveys defined eight dimensions: communication; feedback; interpersonal treatment; leadership; physical environment; rewards and recognition; staffing; training and development. Blankenship says that the quarterly follow-up surveys measured the performance of restaurant managers, which were a component of the manager's performance review. “We used those results to inform our restaurant operations team about what was really driving employee engagement and performance. To their surprise, it was less about pay—despite entry-level wages associated with the quick-service restaurant industry—and more about consistent staffing, training and feedback.”
Jack in the Box was able to refine its people data down to eight dimensions of service and had employees rate their managers on these eight dimensions. This information was then shared with the restaurant managers, which enables them to assess their own performance. After a year of sharing this feedback with managers quarterly, the company made this process part of a manager’s regular performance review in order to hold them accountable.
This is an excerpt from i4cp's report, Employee Engagement Strategies and Practices, available to i4cp members exclusively.