The Advantages and Disadvantages of Food and Beverage

Services

ADVANTAGES
People got to eat! For years upon years, people have been hardwired to grab something to eat
when they are hungry. This is a major advantage for any startup restaurant. The only thing you
need to consider is the future of your product, and will there be a demand for it in your local
geographical area. That’s really it in my opinion. People have to eat and here in the U.S. and
around the world is something we all enjoy to do. It’s not like opening a haberdashery. Food is
universal, and our very basic senses can lead us there. We’re lucky to live in a country where you
can try cuisine from all over the world without having to travel to those parts of the world. When
people see a restaurant they know there will be food, but now you have to get them into the door
and we’ll discuss marketing later on in this guide.

DISADVANTAGES
Labor I’m sure you’ve noticed that most food businesses need a lot of employees to function
properly and smoothly with the majority of those workers being low-paid. That leads to a
workforce of unreliable employees with a high turnover rate. Finding and keeping qualified
employees is a major challenge for the food industry.
Low margins – The food industry is very price sensitive, more so in the world of fast food
chains. This leaves you with a very fine line to walk with cost of goods, labor and making a
profit. It’s true that food franchises often see high revenues but the net margins are often
overlooked. You are also susceptible to food spoilage and theft along with other issues only
found in the food industry. I’ve seen anywhere from 4%-11% depending on rent, food and labor
cost. We’ll talk more about his later on when negotiating rents and setting up a clear budget. We
will also explore my free restaurant software www.recipe-costing.com that can help you get your
costs and your daily breakeven number.
Expensive initial investment – A restaurant will require a substantial investment from you in
order to get started. You need to pay for many items up front in order to run the business. Not
only do you need to pay for the food and labor, also ovens, grease disposal, venting, furniture,
point of sale system, and maintenance among many other expenses.
There will always be more disadvantages in the restaurant business then there are advantages. I
think more so in the food business with thousands opening up a restaurant in the U.S. not to
mention all over the world. There are people out there that are great cooks at home, and that’s
where they belong at home unless they’re ready to face some of the challenges that are far from
cooking and there are many. Building out a restaurant can be fun or a nightmare. Setting up a
POS system can be easy or hard. Dealing with the State and County is never easy. These things
have nothing to do with cooking; unfortunately, it has to be done to open the doors.
Local Studies
Commercial hospitality has its origin rooted back in Mesopotamia era, where hospitality is
connected to providing accommodation, food and beverage (Bennett, 2011). It can be seen in the
history of ancient Greece where travellers where welcomed with the highest level of hospitality,
which included a room to sleep and a hearty meal (Bennett, 2011). Perhaps even today it can be
seen that there are fewer numbers of hotels which lacks in smooth operations in F&B services.
(Janta, 2012). Accorording to Briscoe&Tripp (2014) The food and beverage services is defined as
the F & B service operations are the process of making, presenting and serving of food and
beverages to the consumers at the F&B premises, which can be: Restaurants, Bars, Hotels,
Airlines, Cruise Ships, Trains, takeaways. F&B service is also the responsibility of sustaining the
best and the high quality of food cooked in kitchen and beverages made in the bar for the guests
(). F&B operations in the hospitality sector focuses on immediate utilization of food and drinks
and includes different types of restaurants (Cousins, Lillicrap & Weekes, 2014). Therefore, Service
is the entire experience that an individual or guest gets from the staff who is fulfilling the needs
and requirements during the stay in the F&B premises(Kandampully&Suhartanto,2000). F&B
service is of many types such as: table service, self- service, assisted service and single point
service.

F&B services is a vital part of everyday life of any sector of hospitality industry. It encourages
assortment of food and beverage concepts and cuisines. F&B services plays a primary role in
functions of hospitality. Therefore, it can mould itself as per the need of the business. From a
customer’s point of view F&B services is an experience which starts, when a customer enters the
premises follows it with meal/drink and it ends when the customer leaves the premises (Davis,
Lockwood, Alcott & Pantelidis, 2012). The entire F&B service team are involved to perform
extensive variety of tasks that incorporate service preparation, welcoming and acknowledging the
guests, order taking, settlement of the bills and last but not the least executing the various tasks
after the guests leaves the premises (Mok, Sparks & Kadampully)

F&B stores are segregated in to following categories: Restaurants: they are of many kinds such as
All day dining restaurants, lounge, bars, room service, conference rooms and ball rooms.
Therefore, in these restaurants the food and drinks is served and give various types of F&B
services. There are many ways disclosed in scholarly journal articles which helps in maintain the
service quality in hospitality industry.
Foreign Studies

The 2013 National Restaurant Industry Survey represents the first national employer
survey of work and human resource management in the U.S. Restaurant Industry. It documents
the range of practices adopted by employers and how those practices affect turnover and
employment stability – problems that are endemic across the industry. They examined
management practices and outcomes in four customer segments: fine upscale dining, casual fine
dining, moderately priced family restaurants and fast food / quick service restaurants. High levels
of employee turnover are problematic in restaurants serving all four customer segments – leading
to higher employee costs and lower service quality and organizational performance. In fact, the
survey data demonstrates that better human resource practices can reduce employee turnover
almost by half.
They surveyed restaurants in the 33 largest metropolitan areas of the country, where wages and
the cost of living are likely to be higher than in smaller cities and towns – and where higher
competition is likely to drive employers to invest more in employees in order to compete more
effectively on quality and service. Over half of these restaurants are located in states with tipped
and non-tipped minimum wage rates that are considerably higher than the federal minimum rates.
Thus, the wages, human resource practices, and turnover reported by managers in this sample
should represent somewhat better conditions than those found in a nationally representative study.
Nonetheless, even in this sample, the proportion of restaurants that adopt better human resource
(HR) practices and invest in the workforce is modest. Several findings are noteworthy. According
to National Survey, the first national employer survey of work and human resource management
in the U.S. restaurant industry, they conducted a telephone survey of managers in 1,150 restaurant
establishments across the country. Managers in each workplace provided information on the types
of customers served and restaurant characteristics. They reported the number and types of
employees providing front-and-back-of-the-house services. For this report, front-of-house
employees include servers, bartenders, hosts, bussers, runners, barbacks and cashiers. Back-of-
the-house employees include line cooks, prep cooks, dishwashers and potters. For each of these
groups, managers reported on their human resource practices – including staffing and selection,
training and development, compensation, and the organization of work. Performance outcomes
such as turnover and employment tenure were also addressed.
In this report, we provide an overview of the restaurants included in our study as well as
our findings regarding the use of different management practices and their relationship to key
outcomes.
According to Human Resource Management for the hospitality and tourism industries written by
Dennis Nickson, there are arguments for best fit advocate a close fit between competitive strategies
and Human Resource Management, those in favor of best practice approaches to HRM suggest
that there is a universal ‘one best way’ to manage people. By adopting a best practice approach it
is argued that organizations will see enhanced commitment from employees leading to improved
organizational performance, higher levels of service quality and ultimately increased productivity
and profitability. Usually couched in terms of ‘bundles’, the HRM practices that are offered in
support of a high commitment and performance model are generally fairly consistent. For example,
Redman and Matthews (1998) outline a range of HR practices which are suggested as being
important to organizational strategies aimed at securing high-quality service:
Recruitment and Selection. Recruitment and selecting staff with the correct attitudinal and
behavioral characteristic. A range of assessments in the selection process should be utilized to
evaluate the work values, personality, interpersonal skills and problem-solving abilities of
potential employees to assess their ‘service orientation’.
Retention. The need to avoid the development of a ‘turnover culture’, which may course be
particularly prevalent in tourism and hospitality. For example, the use of retention bonuses to
influence employees to stay.
Teamwork. The use of semi-autonomous, cross-process and multi-functional teams.
Training and Development. The need to equip operative level staff with team working and
interpersonal skills to develop their ‘service orientation’ and managers with a new leadership
style which encourages a move to a more facilitative and coaching style of managing.
Appraisal. Moving away from traditional top down approaches to appraisal and supporting thing
such as customer evaluation, peer review, team based performance and the appraisal of the
managers by subordinates. Generally, all of these performance appraisal systems should focus on
the quality goals of the organization and the behaviors of the employees needed to sustain these.
Rewarding Quality. A need for a much more creative system of rewards and in particular the
need for payment systems that reward employees for attaining quality goals.
Job Security. Promises of job security are as seen as an essential component of any overall
quality approach.
Employees Involvement and Employer Relations. By seeking greater involvement from
employees the emphasis is on offering autonomy, creativity, cooperation and self-control in work
process. The use of educative and participative mechanisms, such as team briefings and quality
circles are allied to changes in the organization of work which support an ‘empowered’
environment.
Mc Donald’s is the world’s leading fast-food company by sales, with about 32,000 restaurants
serving burgers and fries in about 120 countries. It consists of Human Resource Functions
followed to acquire employees.
Job Analysis. In Mc Donald’s job analysis done on the basis of interviews. They have
predetermined standards on which employees are awarded on the basis of their skills, knowledge
and experience.
Recruitment, Selection and Retention. For Mc Donald’s, people are its important asset. This is
because customer satisfaction begins with the attitudes and abilities of employees and effective
workers are the best route to success.
Recruiting Suitable Applicants. Positions are generally advertised in the restaurant. The
company’s recruitment history shows this is the best method of hiring quality staff. It also uses
local job centers, career fairs and other local facilities. It is virtual to use effective hiring material
with a clear message targeted at the right audience.
Selection. After the final interview, the manager will rate the responses of the applicant. A
successful applicant will have demonstrated skills and behaviors that have been identified as
being key to the position.
Orientation. Mc Donald’s inducts all new employees into the business through Welcome
Meeting which they must attend. The Welcome Meeting gives an overview of the Company
including job role, food, hygiene and safety training, policies and procedures, administration,
benefits and training and development.
Mc Donald’s performance appraisal methods are graphical rating scale and 360 degree feedback.
For better and innovative human resource management, Mc Donald’s implemented K/3
HR Personnel Management, Payroll Management and Report Module as well as Performance
Management, Employee Capacity Quality module. Mc Donald’s has built HR management
platform and finished planning for organization structure, managed personnel files, input
dynamic human resource data and managed payroll. Based on K/3 HR System Personnel
Management and Payroll Management, Mc Donald’s not only records employee transfer,
promotion and transfer history but also adjust the workflow.
If a resigned staff come back and rejoin in K/3 HR System checks ID Card Number and
lists all the history of the staff, which helps the manager make proper decision.
The concept of human resource management first appeared in the 1980’s and the use of the term
grew in the 1990’s. Initially, writers in the field focused on trying to distinguish between
personnel management and HRM, but according to Boxall and Purcell (2008) HRM has, in spite
of the lack of clarity over definition, become the most popular term to refer to the activities of
managers in relation to people management.
The glance through any journal relating to human resource management nowadays, will find countless
advertisements relating to the various ways that information technology can assist those in HR
department to do their jobs. These include systems for e-recruitment, online short listing of applicants,
online performance management and appraisals, e-learning, online psychometric testing, as well as IT
systems to help with payroll, employment data, recruitment administration, references and pre-
employment checks. There are also large organizations which use HR shared service centers where they
bring many of the HR services together and use technology such as e-mail, a company intranet or
telephones to provide HR information in order to deal with HR queries and provide expert advice for
people working at various sites, sometimes in different countries.
The increase use of information technology is already having all of these effects, at least to some
extent. For many HR managers, IT for routine tasks frees them from more mundane tasks, so they
have more time to think strategically. Increasing use of IT has also ensured a much greater amount
of information is available on which to base decisions and to plan for the future.
Local Studies
According to Vivien T. Supangco in her Strategic HR Practices in Some Organizations in the
Philippines research study, strategic human resource (HR) practices in a convenience sample of
organizations in the Philippines and compares result of Cranet (Cranfield Network) surveys
conducted in 2003 and 2008. Characteristics of sample organization as well as their strategic
planning process generally obtain, but involvement of HR from the outset of business strategy
formulation does not yet characterize the majority of this organization.
Information System (HRIS) formerly Personnel Management Information System consists of areas
in Local Governance:
Administration (Support Services/Administrative Services and Human Resource Management)
Services (Payroll Processing and Records Management)
The HRIS is a LGU type, locally used by Provincial Government of Bulacan. Its functions are to
give innovative services in maintenance of personnel records, payroll management and processing
and biometrics time keeping.
http://www.bulacan.gov.ph/government/pmis.php
Human Resource Innovations and Solutions, Inc. (HURIS) is a Philippine-based Knowledge
Process Outsourcing (KPO) and Consultancy company that started in 2005 by seasoned HR and
IT Professionals. It is a complete HR solutions provider that enables business transformation
through advanced methodologies and information technology.
The company specializes in providing Business Partners with superior technological solutions and
high level outsourcing services across all functional areas of Human Resources. The company’s
main thrust is to provide the Business Partners assistance in the design, management, development
and streamlining of systems, functions, procedures and processes to increase organizational
efficiency and maximize internal resources with the use of local HR Management Systems and
high level HR Outsourcing services. Their products are Attendance Monitoring System (AMS),
Human Resource Management System (HRMS), integrated Cooperative Management System
(ICMS), Payroll System and ePayslip. The services they provided are HR Knowledge Process
Outsourcing (HR – KPO), Payroll Business Process Outsourcing, Special Projects (HR Audit /
Benchmarking, Performance Management, Pre and Post Retirement Programs and etc.
The Government Human Resource Information System (GHRIS) project is envisioned to provide
the Philippine National Government with a comprehensive human resource management
information system for all of its 1.7M government employees. The GHRIS application and data is
to be centralized and is accessed through a friendly and intuitive interface via a computer web
browser. The GHRIS application should have the capability to be accessed at over 1,500 various
locations within the Philippines, with some locations having limited electrical and networking
capability.
The system should be able to initially support 10,000 operational users with the ability to expand
to cover 1.7M users should the Employee – Self Service be activated. Access to the system should
be controlled and restricted to individual accounts using unique personal login information. The
ability to define levels of user access rights within the system and other strong security features
and measures are required functions.
In its finalized implementation, the GHRIS system should handle the complete lifecycle of all
national government employees including their initial entry into service, to their retirement or
separation which includes the following HR actions such as recruitment and hiring, promotions,
retirements, awards, evaluations, casualty operations, calculations for re-contracting requirements,
retention, assignments, training, schooling, finance, absences, personnel assigned equipment and
other associated personnel actions specific to the different agencies and common within the
government. The system should also support and streamline lengthy approval processes by
providing an efficient and timely method of approving and tracking actions.
The human resource management information system is for 6 pilot government agencies namely
the Commission on Audit (COA), The Department of Budget and Management (DBM), The
Department of Finance (DOF), The Bureau of Treasury (BTr), the Department of Science and
Technology Advanced Science and Technology Institute (DOST-ASTI) and the Department of
Science and Technology National Computer Center (DOST-NCC).
The GHRIS Software Application
A Commercial Off The Shelf (COTS) Software that fits the specifications and requirements
of the project as stated inclusive of licenses and other associated costs such as.
installation, customization and some training and orientation for the six pilot agencies named
above as well as the different environments (Development, Testing, Pre-Production, Production
and Disaster Recovery environments) for the Application Software.
The GHRIS Database Infrastructure
Software and related licenses for the different environments (Development, Testing, Pre-
Production, Production and Disaster Recovery environments) for the Database software.
Consulting Services
Consulting and Technical Services as deemed needed in order to analyze, develop and implement
the GHRIS Project
Technical Services in order to install and configure the GHRIS Software to fit specifications and
requirements.
Technical Services in order to configure and customize the Hardware and Software of both the
Application and Database Portion
Training
2.3. Synthesis and Relevance to the Study (Matrix – Comparative Analysis)
The above related studies are all significant to the proponents’ recent project development. The
essential researched related studies above and the proponents’ project focused on Human Resource
Management and its divergent fields. Both discussed the different parts or key areas of human
resource as part of the systematic process of managing employees.
Foreign and local related studies stated common human resource management key areas or process
routines likewise to the proponents’ studies as part of systematic planning and process in managing
employees. The key areas or process routines are Recruitment and Selection of suitable applicants,
Retention, Evaluation and Probation for appraisals, Monitoring of employees’ profile and 201
Files, etc. The most common focus of all studies is the employees.
One related study stated the acceptable fact that employees are considered as an asset of one’s
enterprise and one of the reasons of its success. So the management must adhere and improve the
strategic planning and implementation approach when it comes to human resource management.
This related study also shows the recognition of the workers and valued as the stakeholders of the
enterprise.
Another related study shows that human resource management is now joining and complementing
the field of information technology, even in private enterprise or in government sectors and
agencies. The future of Human Resource Management is now seen as systematic, integrated,
computerized and more innovative. Most of the private enterprise and government agencies are
now implementing Human Resource Management System that can process different key areas or
procedures in a span of short range of time. They can handle multitasking and increased level of
productivity by acquiring the new process.
There are local related studies featured the system or application that can managed human resource
and even payroll. This is the goal of the proponents to develop a system which can fulfill human
resource management tasks and processes that generically suites to different enterprises. The
proponents researched in local and foreign related studies shows that the Human Resource
Management now deals with the technology to reduce cost of processes, ease the process, gain
productivity and be multitasking and to be globally competitive and successful on the field they
concerned with.