Employee Recognition | Texas Roadhouse

KUD
O . C . TA NN E R
VO LU M E 1 4
NU M B E R 1
S
Texas
Roadhouse
The Benefits of Branding
Recognition
W
alk into any Texas Roadhouse restaurant and
you will see, smell, and hear the very tangible
culture of this remarkable company. In a word, it’s fun.
“If your employees are having fun then, they are
going to have fun with the guests,” says restaurant
founder Kent Taylor. “The biggest compliment
I get when I talk to people coming out of our
stores is not that they had great food or
great service, but that they had fun.”
Make no mistake, this party has
purpose. “Culture by design, not
default,” is the Texas Roadhouse
leadership team’s mantra. The rapidly
growing, $1.2 billion (including
franchise sales), 335-unit restaurant
chain is proud of its rowdy reputation
and the culture it encourages among
employees and guests. // continued inside
G . J . H a r t, C H I E F
EXECUTIVE OFFICER,
T E XA S R OA D H O U S E
RECOGNITION SNAPSHOT
2 x$
Source: Increasing the Role of Reward and
Recognition in Incentive Plans, Compensation
Roundtable, 2009.
Double Your Money
A
nalysis conducted by the
Compensation Roundtable reveals
that reward and recognition programs
can have more than twice as much
positive impact on employee performance
and retention as annual bonuses.
Couple that with the fact that most
employees’ desire for job recognition
has increased by 15 percent across the
past several months and appreciation
becomes a major motivator for
employees and employers.
W W W. O C TA NN E R . C O M
FUN
T op, W e n dy E n n is , M a n ager
B ottom , D av e D odso n ,
C omm u n icatio n s D irector
“Culture for us really is one of our biggest
assets,” says Dave Dodson, communications
director. “We talk all the time about really
making sure that we are protecting our
culture, that we’re investing in our culture,
that people understand our culture, that new
people we are bringing into our company learn
the culture.”
In fact, the company boldly claims
the status of “legendary;” using the words
“Legendary Food. Legendary Service.” as both
mission statement and sincere commitment to
employees, customers, and culture.
“You can’t have Legendary Food and
Legendary Service without Legendary People
having Legendary Fun,” says Mark Sampson,
senior director of Legendary People for Texas
Roadhouse.
The Case for Culture
What does “culture” mean to Texas Roadhouse
or any organization trying to find, instill, and
promote a sense of identity and belonging
among its employees?
“Organizational culture is possibly
the most critical factor determining an
organization’s capacity, effectiveness, and
longevity,” says Linda Devis, expert in building
high performance cultures and organizational
development. “[Culture] also contributes
significantly to the organization’s brand image
and brand promise.”
The company has been called to defend
its efforts to maintain and promote company
culture in recent months. Texas Roadhouse
CEO, G.J. Hart, appeared on CNBC to answer
tough questions about why the company has
continued to invest in recognition events and
celebrations with shareholders and current
economic conditions to consider.
“We’re all about our people and our
culture,” Hart told the CNBC interviewer. “We
live by a philosophy in our company that if
we take care of our people, they’ll take care of
our guests. And that’s exactly why events like
these are important in times like this. We’ve
got to give a little to get a lot...and, in fact, I’m
not sure we’re doing enough.”
Hart pointed to recent company earnings,
growth, and the fact that 70 percent of the
restaurant’s guests are repeat customers as
evidence of the success of Texas Roadhouse’s
attention to cultivating culture.
The interview has become a rallying cry
for the restaurant’s leaders, operators, and
employees.
“The interview was pretty incredible.
It’s an honor to be a part of a company
that’s so committed to taking care of its
people–especially now,” says service manager
Wendy Ennis, Clarksville, IN. “At a time when
most companies are saying, ‘Don’t love your
people very much, don’t do anything extra,
just tighten the belt as much as you can,’
it’s almost as if our leadership does just the
opposite. The message we get is, ‘Take care of
your people especially right now. Love your
guests especially right now. Take care of your
community especially right now.’ And you
know what? The guests tell us they can feel it
too and they love it.”
For Hart the secret to Texas Roadhouse’s
success is no secret at all.
“It’s like if you make an investment in your
401 K, you’re saving money for the future and
you expect to return on that investment and
you have to put up money to do it,” explains
Hart. “For the life of me I don’t understand, if
you have people as your biggest asset and you
claim they are your biggest asset, and in our
case it’s such a people intense business, then
how can you not invest in them and expect a
return?”
Training for Fit
“For the life of me I don’t understand,
if you have people as your biggest asset
and you claim they are your biggest
asset…then how can you not invest
in them and expect a return?”
— G
. J . H art, C E O , T e x as R oadho u se
W W W. O C TA NN E R . C O M
For many organizations growth threatens
culture; requiring more processes, systems
and rules to keep things moving smoothly.
Texas Roadhouse focuses heavily on training
to ensure the restaurant’s culture of fun grows,
thrives, and continues to stick.
“We train both management and
employees across the board, not just about
the specs and the procedures and how to cut
a legendary steak and how to make legendary
green beans, but also about the culture of
what this company is all about inside the
four walls,” says Lisa Dwelly, director of
employee development. “Our guests visit Texas
Roadhouse because it is such a fun exciting
environment, so we train our management and
our staff how to really show that on a daily
basis.”
How do you train fun? Texas Roadhouse
founder, Kent Taylor believes it all begins with
recognition.
“Before I started this restaurant, I
worked for others,” explains Taylor. “I did a
lot of contests for employees and other crazy
things in the store that I got in trouble for.
Many times we had to hide stuff so that the
people at the corporate office didn’t know I
was doing fun things in the stores that cost
money. So I said one day, if I get to open
my own restaurant, I’m going to recognize
and celebrate people the way I want to and
not worry about somebody looking over my
shoulder telling me I can’t do it.”
Today, Taylor realizes that while fun is
the focus, formalizing recognition and putting
a framework around how to celebrate helps
maintain a focus on the brand and keeps the
business strategy intact.
“You have to formalize the recognition
when you get to the size we are because you
can’t go into every store and try to get people
to get it,” says Taylor. “I can remember having
an area manager and come to me and say, ‘I
found a way to save money at the openings.’
He said, ‘We need to cut out all these crazy
contests and things we do to recognize people.’
And so I kept him in training an extra six
weeks because he didn’t get it.”
Creating a Framework for Fun
Formalizing recognition—standardizing the
many contests, promotions and recognition
occurring in hundreds of locations across the
country, required a plan.
“Our promotions centered on different
parts of the business—meat cutters, bar
tenders, line dancers,” says Dodson. “The
recognition was good, but there wasn’t much
that tied it together. We were looking to create
a movement among all our employees and that
required a more cohesive approach.”
Dodson and his team partnered with O.C.
Tanner to create “Living Legends,” a branded
approach to recognition at Texas Roadhouse
that allowed the restaurant to communicate
tools, training, goals and messaging in
one well-understood format while offering
milestone and performance recognition with
more meaning.
“Through our partnership with O.C.
Tanner and the creation of our Living Legends
recognition platform, we have developed a tool
box of materials that our operators can reach
out and use to help and aid their efforts that
they already have in place in their stores,”
says Dodson. “To us, it serves as a trigger
for recognition. Whether it’s an employee
service milestone or an employee performance
achievement, our stores have something that
they can reach out and use to support all the
great things they do in the store.”
Dodson and his team of trainers rely on
O.C. Tanner’s Carrot Culture team to keep
them up to date on the latest best practices
and information when it comes to recognition.
“We’ve been involved in developing
recognition in our company for many years,
but it doesn’t mean we’re experts,” says
Dodson. “Carrot Culture training really helps
us to take our internal training to the next
level. The training always focuses on the best,
most recent information including new studies
and best practices. And it’s at that point you
know the results organizations are generating
through smart recognition programs are not
just ideas. That’s exciting.”
M ark S ampso n ,
S e n ior D irector o f
L ege n dar y P eople
Texas Roadhouse employees love their work so much they wear it on their sleeves—
literally. In 2005 the company introduced a bold “I Love My Job” t-shirt campaign.
They did not mandate the shirts, but instead simply made them available for employee
purchase. To date more than 200,000 shirts have been sold.
Res ults that Matter
Paying attention to culture. Recognizing
achievement. Celebrating like family. It’s an
approach that has earned Texas Roadhouse
greater levels of employee satisfaction and an
impressive 30 percent reduction in turnover in
its locations that use recognition most.
Other company metrics also speak to the
success of Texas Roadhouse’s approach to
cultivating culture. In 2009:
• Diluted earnings per share increased 29%
• YTD stock is up 58.63% from 12/30/2008
to 12/29/2009
• Five company restaurants opened and one
franchise restaurant was acquired
• Restaurant margins increased 237 basis
points to 17.4%
“Why create a culture, when you can create
a movement?” says Dodson. “We want to create
a movement that our employees and our
customers can really engage in. Being smart
about showing our appreciation in as many
ways, for as many results as we can think of,
will help create that movement.”
“We’ve also seen amazing reductions in
negative employee phone calls,” says Dodson.
“Alongside measurements like how much the
program is being used, those types of culture
shifts tell us we’re doing something right.”
And while every company is different,
Dodson believes every company has to create
a unique culture for themselves and anyone
can create a culture that their people can
embrace and believe in.
K e n t tay lor ,
f o u n der
“Recognition really is a simple choice,” says
Dodson. “We have seen that over 16 years of
our business at Texas Roadhouse. Taking care
of your people makes a difference. It drives
results. It creates success.”
CEO Hart says recognition is an
investment in your people that pays rich
dividends.
“As a leader, you must serve your people.
And in our case we really try to live that and
I think it’s paid dividends,” says Hart. “When
you get tested on those commitments is when
people really pay attention, and they have
very long memories when it comes to whether
or not we deliver. I’ll invest in our people until
the day I die and that’s hopefully why we’ll
continue to be successful.”
AWA R D S P O T L I G H T
Hospital Week:
May 9-15
CARING BEGINS
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ku•dos
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KUD
In this issue…
Texas Roadhouse:
Branding Recognition
Double Your Money:
Appreciation’s ROI
Thanks for Caring
Hospital Week: May 9-15
O.C .T.
VOL. 14
N O. 1
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Publisher O.C. Tanner
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Photographers Shauna Raso
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