Answer to Question 1
Benefits are part of a comprehensive compensation structure and can be classified in four broad
categories: mandatory, optional/voluntary, retirement, and miscellaneous. Mandatory benefits
are those mandated by the state or federal government. There are three primary mandatory
benefits that most nongovernmental employers must provide. These are Social Security, Workers
Compensation, and Unemployment Compensation. Common optional benefits include paid sick
days, paid vacation days, health insurance, life insurance, dental insurance and paid holidays.
The cost associated with each of these benefits can be significant. Retirement benefits include
pensions of various types. Miscellaneous benefits often include free or discounted meals,
educational scholarships and flexible work schedules. In the foodservice business it is common
to provide some type of meal benefit.
Answer to Question 2
One common management incentive is structured around the achievement of a specific food
and/or labor cost target and/or a profit level for the operation. Generally the reward for
achieving the target may be a bonus or profit sharing. The level of bonus or profit sharing
generally is scaled according to the level of the employee. For example, the chef would receive
more than the sous chef, but the chef would receive less than the general manager. A related
second type extends to the other staff in the front and back of the house. If a property achieves a
specified goal, there may be a bonus for all team members. Another third common type of
incentive program in the restaurant business is sales based. An example is creating a reward for
the server who sells the most wine or desserts. Generally these types of programs are intended to
accomplish two goals. The incentive is designed to increase overall sales as well as to drive sales
of a particular part of the menu or menu item.
This chart illustrates the four quadrants in which we can place the relationships between the state
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