This is the third part of a series addressing the lack of talent in the F&B industry in the UAE. To see the first 2 parts, please click on, #1, and #2
Having seen many employment offers over the past eleven years, I can honestly say that the major disappointment is when employers dangle the carrot in front of a non-qualified candidate, by noting that there will be extra income (Bonus) if the candidate meets certain KPIs. They do this to justify one of two scenarios. The first; is to keep the candidate from getting a high salary. The second one is to make sure that the new hire is motivated to be a magician, or one who can perform miracles. Very seldom do companies reward performers based on KPIs. They always try their best to prove that one did not meet them. That way, they do not have to pay extra money.
Having said that, when writing the offer, most often, the KPIs are not outlined during the meeting to review the offer. They always write (You will get–% of the net profit, Based on KPIs that will be set prior to your starting date). Now, you signed the offer, yet you do not know how much more money you will get (If any). In addition, you either never get the KPIs, or get them very late into your employment.
Keep in mind; they hired you because they are struggling and they need a savior. To tell you that you will make more money if you are a magician, is only to get you excited about the company, and how they are willing to part with –% of ZERO, to keep you financially happy.
Who ends up signing an offer for a small salary and hope to make a bonus based on KPIs? The non-talented person whom can’t even figure out that he/she will never make more money based on the financials. Oh…forgot to note that, no one ever shares with you financials prior to your joining date. They expect you to improve something in which you do not know anything about prior to starting. You are the candidate that selected to accept such conditions, and this is the company that is expecting you to help them grow. What a great match.
You might ask; what does the KPI issue have to do with the lack of talent? Let’s explain. As long as the industry leaders keep hiring talent and paying them small salary, while promising extra bonus based on KPIs, they will never be able to attract good talent. Then; most companies end up with non-talented leaders. Those leaders can never develop others. We end up with the case of non-talented leaders, leading non-talented followers, whom they can never develop. How can we build talent if we cannot hire talent? How can we attract talent when we end up offering the talented leaders small salary and think that we can fool them by offering them more money based on non-achievable KPIs? Making KPIs dictate part of the salary is a good idea as long as we apply it correctly.
How should companies apply the KPIs?
To apply a proper pay structure based on KPIs; certain criteria’s have to be met. First: the person doing the hiring should disclose the current situation of the company in which needs to be improved using KPIs. This way, the candidate can decide if the KPIs are achievable, or he/she are qualified enough to achieve them. Second, companies should structure KPIs using the (SMART) format. Specific, Measurable, Attainable, Realistic, and Time bound. Then and only then can one evaluate the reality of making more money. Very often, companies design KPIs in such a way that it is impossible to achieve. The expectation of what is acceptable when delivering performance from the employer and the candidate are not even close. Therefore, do you blame good talent for not falling into the KPI trap? In addition, we need to focus the majority of the KPIs on non-financial accomplishments, which in turn would increase the financial rewards for the company. Examples of things that should be on the KPIs are: Guest satisfaction (Both internal and external), Proper representation of company core values, Team members turnover, food safety, being the employer of choice, involvement with the community and, managing cost (Not controlling it). These are all things one can measure to decide if the leader is truly a good one and should receive extra compensation. Anyone can try to meet KPIs which are 70% based on the financial results. One can increase menu prices, charge huge amount for local bottled water, cut on portions, use inferior quality raw materials, save on napkins, not pay overtime to team members and, renting far away accommodations to save on rent. Doing so, will never be a long term plan for success.
It is evident that the use of KPIs in this region is utilized to show how progressive the company is. Companies use them to tell others that the company is following international standards of pay, and to impress the few that even understand what a KPI is.
Let us stop the madness of the fake KPI system
While performance based compensation is a great motivator, and I am very much in favor of it, I do not think this region is ready for such system. Candidates are used to a system where companies guarantee income, and are not dependent on vague systems for compensation. No one wishes to move to this region and base his/her income on a target that is set so far that one cannot hit, set using unrealistic expectations, or set without knowing where the start is from the beginning. To stop the madness, let us think of how we can utilize the KPI system correctly, or not at all. Keeping a system that is not applicable will cause both the employer and the candidate lots of frustration, and loss of financial rewards.
When the principles of the company realize that you have worked hard, and maybe the company was in worst shape than they thought, so they granted you the bonus because you made a serious attempt, and made progress, I call that a lucky shot. Professionals are never looking for handouts. Professionals want to fulfill commitments. Professionals do not want to depend on the kindness of the company principles. They want to feel that they earned their bonus. Not applying KPIs correctly causes the company to depend on the generosity of its principles to make talented and good professionals stay. Unfortunately, company principles lose sight of the fact that; talented professionals are often offended when they have to depend of their generosity rather than on a well-developed compensation system. No professional feels good when he/she have to ask for their bonus. That feeling takes place only when the generosity standard is applied, and not the correct KPI system. Let us declare that the KPI compensation system is on life support, and that is why we have a huge problem lacking talent in the GCC region.
