Early one morning in December 2019, Annette Lee and Nicole Carrier,…

MateMoonKookabura23 Early one morning in December 2019, Annette Lee and Nicole Carrier,…Early one morning in December 2019, Annette Lee and Nicole Carrier, the founders of Throwback Brewery (Throwback), sat around a wooden table at their establishment reviewing their business goals for 2020. Their top goal was to sell more food and beverages to their existing customers. In calendar year 2019, Throwback had been averaging food and beverage tabs of $24.77 per person. The owners also strived for Throwback to be nationally known as a “must stop ” New Hampshire (NH) destination for food and beer, rivaling anything Maine and Vermont had to offer. While this was a hard goal to measure, the partners decided to gather information informally through national press mentions, social media tags, and anecdotal stories of people telling them they were recommended to visit. Keeping employees engaged and making Throwback one of the best places to work in New Hampshire was also high on their priority list. The partners would measure this informally by employee comments and attitudes, employees achieving desired results and employee turnover rates. Nicole said to Annette over breakfast, In order to meet our business goals, we have to really tap into the full potential of our employees and reduce their uncertainty about how well they are doing on the job. This is why rolling out a personnel performance appraisal program in 2020 is so important. It may not solve all our problems, but it should help keep employees focused and motivated. Let’s buckle down and get to work on the details so we can roll it out in January. ANNETTE AND NICOLE In the year 2000, as a couple who loved good food and good beer, Annette and Nicole began homebrewing as a date night hobby. Together, they experimented with a variety of ingredients, creating innovative flavors such as a chocolate peanut butter porter. Friends and family found their beers exceptional and encouraged them to enter contests. Over the next few years, Annette and Nicole won several awards.During the early 2000’s, both Annette and Nicole held steady corporate jobs in industry with high pay and attractive benefits. Nicole was a high-ranking executive at IBM, where she was responsible for product management and marketing. Her time was spent developing product strategies, showcasing products on large stages across the United States and talking to the press. Annette was an environmental engineer who worked for Xact Data Discovery for seventeen years. For twelve of those years, she had worked as a manager in operations. Because of high stress at work, Annette grew physically ill on multiple occasions. She knew she needed to change jobs and start another life for herself. Annette became. interested in the engineering side of brewing, and in 2008, completed the Siebel’s World Brewing Academy Concise Course in Brewing Technology. After taking this course, Annette believed she and Nicole should open a brewery. When considering that possibility, Annette and Nicole talked to small brewery owners. Annette went to Vermont to learn from Lawson’s Finest Liquids and spent time with White Birch Brewing. Annette then began an internship at Smuttynose Brewing Company, which allowed her to gain more information and meet folks in the industry. In 2010, feeling prepared, Annette and Nicole decided to quit their jobs and start a microbrewery. To fund this endeavor, they tapped into their personal savings.THE CRAFT BREWING INDUSTRY According to the Brewers Association, by the end of 2019 there were an estimated 8,000 + craft brewers in the United States, contributing $79 billion to the economy and employing 555,000 people. A ‘traditional’ brewery produced millions of barrels of beer a year while a microbrewery made no more than 15,000 barrels a year. Between 2017-2019, for example, the barrel average for Throwback was 1,100. The craft beer industry experienced considerable expansion over the ten-year period from 2008-2018, according to a Forbes article and data provided by the Brewers Association and compiled by Statista. Despite its rapid growth, the craft beer industry fell under some scrutiny owing to the perception that it was, ‘a white man’s world.” In April 2019, a reporter for the Grand Rapids Business Journal noted that the lack of diversity in the “talent pipeline” was considered a big hurdle to creating more diversity and inclusion. A 2019 survey by the Brewers Association revealed that: Production staff tends to skew heavily male, owners a bit less, while non-production staff have a bit more gender balance. Out] sample showed 54 percent of breweries owned by one gender, 31 percent with 50-50 ownership, and 15 percent with some other mixed gender split. Of the breweries that were owned by one gender, 96 percent had male owners. Additionally, race and ethnicity demographics of U.S. brewery employees showed a range of 76.2% white for production staff (non-managers) to 89% (brewers). A study for the Craft Brewing Business Institute reported in 2016 that only two percent of breweries had exclusively female founders. According to Nicole, I don’t believe being female has hindered our business success. In fact, I think in many ways being female has helped. Our data shows approximately 80% of purchasing decisions made in the home are by females, so their buy-in of who we are and what we do is important. On our social media accounts, we have more female followers than the national average for breweries..In 2011, Annette and Nicole started selling their beer under the name Throwback Brewery in a small warehouse space on the seacoast of NH. Many breweries in the pre-prohibition era, which ended in 1919, had sourced their raw ingredients locally and then processed them before brewing. Annette and Nicole strived to make small batches of high quality, artisanal beer from fresh local ingredients and felt their brewery was, as Nicole described, “a throwback to the past,” which inspired the brewery’s name. Having enjoyed a successful ramp up in company sales, in July 2012, Annette and Nicole took out a loan for several million dollars so they could move to a larger location. Throwback relocated to Hobbs Farm, a move which would eventually allow the company to operate a restaurant. However, Annette and Nicole did not have any restaurant experience. Nicole stated, *We take pride in hiring the right people to get us to where we need to be. We’ve never felt like we needed to do it all. We trust our employees.” Annette and Nicole spent three years operating as a brewery with no food at the new location before they were prepared to open the restaurant to customers. When Throwback opened its restaurant, it was the only full farm-to-table restaurant in NH that featured an active working farm and a craft brewery.The farm comprised twelve acres and four acres were designated for farming. The farm included a hop yard, fruit trees, vegetables, and animals such as chickens, goats, pigs, and donkeys. The partners’ goal was to eventually grow 50 percent of the produce they used and to source everything else within a 200-mile radius. The new location for Throwback Brewery was located minutes from Portsmouth, NH, a- walkable coastal town with a working port. According to the official Portsmouth, NH tourism website the town was ranked as the 26th most “historic place” in the world and 6th most in the United States. Portsmouth had a population of 21,000. The town’s local art, shopping venues, and restaurants lured tourists to the area year-round. Annette and Nicole resided in a house on the property of Hobbs Farm. Reflecting on the decision to live on the property, Nicole recalled, “It made financial sense for us, but it was hard. There was no separation of work and life outside. We could look out our windows and see the restaurant was busy. At times, employees would walk over to the house and ask us questions.” Throwback was a seasonal business. Excluding the winter months and rainy days, for the most patt, they were always at full capacity at 75 seats filled. Compared to the relatively slow post-holiday period, during the brewery’s peak summer season, 1,600-2,000 customers were served each week. The month of August saw two-and-a-half times as much business compared to the winter month,HUMAN RESOURCES The company structure included Annette, who assumed the responsibilities of Director of Brewing Operations, and Nicole, who ran the business as its President. Team Leads reported to both Annette and Nicole, and included a Head Chef, Head Brewer, Lead Farmer and Lead Server. Exhibit 1 shows job descriptions of personnel at Throwback. In total, the company had 42 full and part-time employees: 28 employees worked year-round, while the remainder consisted of seasonal workers who worked in the summer, Female employees comprising the vast majority of Team Leads and employees. Although Nicole and Annette did not actively seek female employees, they knew female employees were attracted to the opportunity to work for them as Throwback was the only brewery in NH that was 100 percent women-owned. As reported by the National Restaurant Association, the turnover rate in the United States restaurants-and-accommodations sector was nearly 75% percent in 2018, compared to the turnover rate at Throwback in 2018 and 2019 which was under five percent. The partners believed turnover was low because they worked hard to hire the right people, there was a strong positive culture established and because the company did a lot to support the community, Team Leads, who had all been with the company for at least three years, were trusted subject matter experts who had the authority to manage day-to-day tasks, but not to manage people outside of basic scheduling and operational needs. Team Leads would assist with training but would not get involved in hiring and disciplinary matters. The majority of management responsibilities including compensation, conflict management/problem resolution, employee development, and hiring/ firing went through Annette and Nicole. At the height of the season, Annette and Nicole managed 20+ people. According to Annette, because of financial constraints, Throwback did not have a General Manager (GM). Instead, Annette acted as GM. “Because I’m so busy, oftentimes the Lead Server takes on the burden of a GM. This Lead isn’t at the point where she wants to be a manager. Her role is blurry, but I’m stretched thin a lot,” Annette, stated. On several occasions Annette had to remind frontline staff not to treat this Lead (and other Team Leads) as a manager and not to treat Team Leads poorly if they needed to make a management-like decision. At $7.35 an hour, NH had the lowest minimum wage in New England in 2019. Per Salary.comt cost of living in Portsmouth was 20 percent higher than the national average.According to NH state law, a tipped employee of a restaurant who regularly received more than $30 a month in tips from customers could receive a base rate from the employer of no less than $4 an hour. Living a quality life on those wages was challenging and the pay disparity between frontline workers such as bartenders and behind-the-scenes workers, such as the brewers, were always on the partners’ mind. On average, front-line workers made 30% more than employees like the cooks and brewers working behind the scenes. One day, Annette said to Nicole, “It’s unfair how much more the frontline makes because of tips. The tipping system in this country needs an overhaul. Our cooks, farmers, brewers and other staff deserve that kind of money too. Without our amazing food and beer, there would be no tips.” Many Throwback employees held multiple jobs to make ends meet. One Team Lead stated, “You can’t afford to live in this area and make $11 an hour. It’s impossible unless you are living with parents or someone else who is helping to pay the bills. Those of us who work two jobs are always tired.” Throwback paid employees the industry average while their benefits such as healthcare, holidays and paid-time-off were above the industry average. In an effort to even out the pay disparity, Annette and Nicole would give optional overtime opportunities to the cooks and brewers when they could. CULTURE AND VALUES The company’s core values included, “being profoundly kind, striving for excellence and loving the community and planet” as shown in Exhibit 2. Throwback maintained an up-to-date employee handbook consisting of policies that were important to the owners, including but not limited to policies and procedures on: conduct and behavior cell phones, harassment and discrimination, and health and safety. To help foster a family culture, Throwback offered employees and their family members generous discounts on food and beer in hopes that employees would spend time at the brewery when they weren’t working. Many Throwback staff members reported that communication from the owners should be an area for improvement for the company. Several employees commented that they had received raises over the years but had never been informed in advance by Nicole or Annette. Instead, employees noticed the increases in their paychecks. Several employees mentioned they would have liked to have known why they were being recognized. Many craved more time and recognition from Nicole and Annette. One Team Lead stated, “Because Annette wears so many hats in the business, communicating with her can be challenging as she is always busy. Nicole and Annette recognized that communication was an arca for improvement. In mid-2018, they implemented a weekly 30-minute meeting with Team Leads to cover revenue goals, HR related issues such as training and hiring updates, and marketing and brewery updates. Although these meetings were well-attended, “There never seemed to be enough time to cover everything,” according to the owners.PERFORMANCE APPRAISALS IN THE BREWING INDUSTRY Nicole and Anriette also tried to stay up-to-date with what other breweries had implemented for performance appraisals. Kristopher Scholl, Senior Director of Operations and Engineering for the Craft Brew Alliance, gave a presentation on performance management at a craft beer industry conference in 2017. Scholl stated, “As it becomes more difficult to differentiate on the “what,” more and more focus needs to turn to “how.” As craft brewers, are we burdened by being small and forced to find ways to market our “inefficiencies” as something to be celebrated? Or can we be small and efficient? Implementing a performance management culture will improve consistency, quality, efficiency, and profitability. Craft breweries that embrace and apply the principles of world-class manufacturing to their operation will have a competitive advantage over those that hang onto the ideology that being small and inefficient is something to be celebrated. In the end, consumers have many choices and the competition is only growing. Trying to differentiate based on better marketing and better beer is in reality doing what every other craft does. the brewery is trying to do. This presentation will make the provocation that breweries that embrace a culture of performance management and continuous improvement will achieve a sustainable competitive advantage. A roadmap on how to implement a performance, management routine, empower employees, and practical applications will be explored. Prior to 2017, some breweries had systematized formal performance appraisal reviews but had subsequently done away with them. One such brewery was Ninkasi Brewing Company in Eugene, Oregon. On the decision to get rid of reviews, Cheryl Collins, Ninkasi’s Chief People Officer, was quoted in Oregon Business in 2016, “I cannot see the value it’s providing. Employees think it’s the only way to get a raise, and managers do it just to check a box. Who likes it?” Other breweries like Dogfish Head Craft Brewery had invested in enhancing their personnel performance appraisal processes. In a promotional video for a performance Appraisal software company, Bailey Borzck, HR Generalist for Dogfish Head, stated the brewery had been seeking a solution to improve its appraisals process and make the transition from paper to digitized appraisals. Dogfish Head conducted monthly one-on-one reviews, so there were no surprises for its employees at the yearly review. Borzcki believed the company’s heightened focus on performance management helped with communication. She noted that all the employees she had spoken to about the changes greatly appreciated the opportunity to have special one-on-one time with their managers and to understand how they were tracking in their work. Borzck believed that Dogfish Head’s employees became more engaged as a result of the company’s added focus on performance appraisal. HOW TO IMPLEMENT A PERSONNEL PERFORMANCE APPRAISAL? Hours into their conversation, still seated around the wooden table, Nicole mentioned she had obtained a sample performance appraisal form from a friend who ran another craft brewery. The sample performance appraisal form is shown in Exhibit 3. Nicole asked Annette, Would a performance appraisal form like this one be suitable for ‘Throwback [Brewery]? Should we even use such a formal form? If so, could we customize it to meet our needs?” “I’m not certain, but I like that you found something that we can leverage. It beats reinventing the wheel,” Annette responded. Annette was planning to send paper surveys to all the Team Leads in January, asking them to give feedback on themselves and their peers in other departments to ensure accountability and an honest reflection of a person and department. Annette was eager to give the employees more structure and a greater voice in crafting and implementing a personnel performance appraisal system, Having taken baby steps towards the implementation of a personnel performance appraisal system, Annette and Nicole nevertheless mused that they had several decisions to make. question How might a formal appraisal process be designed to support Throwback’s organizational goals? How might a formal appraisal process support or detract from Throwback’s organizational goals?  BusinessBusiness – Other