Palio s Pizza Café Richardson, Texas 1 - Weeblynaomimasangu.weebly.com/uploads/5/6/9/0/56902775/obhr_palio_paper.pdf · Palio’s Pizza Café – Richardson, Texas 2 Palio’s Pizza

Palio’s Pizza Café – Richardson, Texas 1

Nicholas Goudeau

Naomi Masangu

Logan Moore

Gabriel Nkoyo


Palio’s Pizza Café was founded in 2001 and has been growing in the Dallas-Fort Worth

area ever since then. Between the first one being founded in 2001 and now there has been 27

Palio’s opened in the DFW metroplex. All twenty-eight of Palio’s Pizza Café’s are privately

owned and family operated. The location chosen for this case study was the Palio’s off of

Campbell and Coit, located in Richardson, Texas. This specific location opened July 7th

, 2012

and is owned by Nate Awad. There is not much company history to be found because each

Palio’s is independent of the other excluding those owned by the same owner. The Richardson

location is an example of a stand-alone Palio’s.

The structure of the organization consist of the owner, restaurant managers, and then the

lower level employees such as cooks, food runners, and cashiers. There is a small workforce that

is behind Palio’s Pizza in Richardson with a total of around 20-25 employees working there at

different times. As expected the lower level employees report to managers, who then have to

report to the owner. However, the owner seemed to give a lot of power to the managers when it

comes to the decision making process. From the information gathered from the Manager Marc

Poulain the environment fostered by management there is one that promotes positivity and tries

to carry that energy to their customers.

There is no organizational mission for Palio’s Pizza Café that is formally put in place.

According to Palio’s website the company takes “pride in pride in our restaurants and strive to

provide a quality product and exceptional service all in a uniquely warm and inviting

atmosphere” (Palio’s Website). This is the only established and written out mission of the

company that we were able to find. Which may be a result from how independent each of the

founded locations are from each other.


The structure as it stands today does not have any major issues. The employees are

treated fairly, the restaurant is seeing increased sales, and customers are happy. However, there

are areas for them to improve on allowing them to reach their full potential. In this report we will

examine this particular location of Palio’s Pizza Café, establish issues in different aspects of the

restaurant, and provide suggestions to help Palio’s fix current issues, and stop future problems

from forming.

Organizational Structure

One of the most vital components of an organization is its organizational hierarchy better

known as organizational structure. According to the lecture material this is defined as “formally

dictates how jobs and tasks are divided and coordinated between individuals and groups within

the company.”(Colquitt, 504) Within Organizational structure there are five dimensions. These

five dimensions are Work Specialization, Chain of Command, Span of Control, Centralization,

and Formalization.

One of the very first actions taken by an organization is the delegation of tasks that need to

be completed in order for the company to survive. This is known as Work Specialization, the

reading material defines this as “the way in which tasks in an organization are divided into

separate jobs.”(Colquitt, 505) In this particular instance Palio’s has certain tasks that need to get

accomplished daily in a timely manner in order for the restaurant to run efficiently. Therefore,

the number of employees needed on a daily basis fluctuates. During Palio’s hours of operation on

the weekend they have a need for more employees in the evening than its lunch hours. In order to

accomplish this Palio’s employs five employees during the lunch hour on Fridays and thirteen

people during the dinner hours on Friday. On Saturday they employ the use of four people during

the lunch hour as well as twelve people during the dinner hours. On Sunday they also employ the


use of five people during the lunch hour and ten people during the dinner hours. Due to the fact

that Palio’s doesn't actually implement a system that employs waiters or waitresses the

employees are assigned various other tasks. There is an employee that takes the customer’s

order, there are employees that prepare that order, as well as employees that bring the food to the

customer fulfilling the customer experience. Within this there are employees that maintain the

integrity of the restaurant as well as prep the necessary food items. Because this is a one off

restaurant and not a chain there are very limited duties to be assigned to the employees.

Another crucial aspect to an organization is its Chain of Command. According to the

required reading this is defined as “the specific flow of authority down through the levels of an

organization’s structure.”(Colquitt, 506) In Palio’s case this flow of authority does not vary

much from the average restaurant’s chain of command. Palio’s has an owner, manager, assistant

manager, as well as various employees that handle the day to day activities. Despite the fact that

there are no waiters or waitresses there are still roles that each employee plays. There is a certain

ranking in place in terms of experience within these general employees, and because there aren’t

any specific titles a high level of teamwork is experienced on behalf of the employees.

Another dimension of Organizational Structure would be Span of Control. The reading

defines this as “how many employees the manager is responsible for in an

organization.”(Colquitt, 506) The span of control for Palio’s manager is wide to a degree. This is

because its in the restaurant business thus, the management to employ ratio is very low. This is

also exacerbated by the fact that this particular Palio’s is a single storefront as opposed to a

restaurant chain. However, despite the wide span of control there seems to be a very high

performance at Palio’s. This performance is due to the high service standards that Palio’s

employs are required to relay on to their guests.


A very crucial aspect as to how an organization is maintained would be Centralization. The

lecture material defines this as “where decisions are formally made in organizations.”(Colquitt,

507) Within this dimension of organizational structure there is a centralized as well as

decentralized structure. Where the first means that “only top managers within a company have

the authority to make final decisions.” (Colquitt, 507) The second means the latter. In the case of

Palio’s there is a combination of both these aspects in place. For instance many of the crucial

decisions are made by the manager. However, employees are given a certain type of freedom to

make decisions that affect them. Take for instance the hiring process of Palio’s, employees are

allowed to recommend a candidate as well as conduct an interview process and give a decision as

whether or not to hire that candidate. This is essential for Palio’s to operate in the manner it

does. It keeps the employees involved and helps them maintain a certain self awareness that their

decisions affect the organization and how it runs enabling them to perform up to the service

standards that Palio’s sets.

The final element of Organizational structure would be Formalization. The lecture

material defines this as “the degree to which rules and procedures are used to standardize

behaviors and decisions in an organization.”(Colquitt, 505) Due to the fact that this particular

Palio’s is a single store front there is a lack of formalization with the exception of the service

standards that they implement.

Being that this Palio’s is a simple structure they are a very organic organization. According

to the reading an organic organization is one that is “flexible, adaptive, outward-focused

organizations that thrive in dynamic environments.”(Colquitt, 510) This perfectly describes

Palio’s and their method of operations. Due to the lack of a waitstaff Palio’s employees have a

very broad interpretation of their tasks. Being that management gives employees unconventional


freedoms such as its vetting process for hiring, as well as a decentralized work environment with

communication of information between employees and allowance of employees to develop

expertise outside of their required tasks, Palio’s is incredibly organic as an organization. The

combination of these elements is why this particular Palio’s is able to thrive and also will

continue to thrive in a restaurant filled town.

Leadership

With a small organization, it is necessary to have leaders who can influence those around

them in a positive and productive way. Palio’s Pizza Cafe is a primary example of an effective

leader. The restaurant has a high sense of leader effectiveness. According to Organizational

Behavior, leader effectiveness may be defined as the degree to which the leader’s actions result

in the achievement of the unit’s goals, the continued commitment of the unit’s employees, and

the development of mutual trust, respect, and obligation in leader-member dyads. Leader

effectiveness was closely observed during lunch time. The restaurant had spectacular leadership

efficiency. The restaurant had employees who had experience in customer service. These

employees were going the extra mile to satisfy their customers. They had high energy levels that

overcame any customers with an attitude that walked through the door. As more customers

entered the restaurant, the employees were illustrating their ability to tolerate stress. Their

experience within the organization demonstrated that they were able to cope with the overload of

customers that arrived during lunch time. All these signs are linked to the business being

effective through the employees.

The manager of Palio’s Pizza Cafe mentioned different ways that the business and its

leaders makes decisions. The restaurant has different styles of decision making. One approach is

the consultative style. Within the consultative style of leadership decision making, a leader


presents a problem to the employees and asks for their opinion on how to solve the issue. This

occurred when there were smaller issues or complaints that customers brought up. An example

may be that a customer was complaining about the cup that is specifically given for those who

request to have water instead of a fountain drink. The customer may think that the cup is too

small and inconvenient because it requires him or her to get up several times to refill their cup of

water. As for the business, it is their rule to distribute smaller cups for those who want water.

This differentiates, regulates, and brings consistency of the allocation of water and fountain

drinks. An employee may talk this through with his or her peers to bend the rules for those who

are in need of a little change. For example, the rules may change if there is a mother of five with

ages that ranges from one to ten. The mother may be an exception or may lead to the manager or

employees to talk to each other and make sure that they may assist the lady with a regular cup.

As a leader, it is important to allow others to include others in the day-to-day decisions.

Palio’s understands that there’s a strong positive correlation with employees involvement and

their job performance and job satisfaction. Palio’s uses the initiating structure as a way for

employees to follow the steps of the leader in pursuit of goal attainment. Leaders who are high

on initiating structure play a more active role in directing group activities and prioritize planning,

scheduling, and trying out new ideas. Managers plan a team meeting each morning with

employees and set goals for each day. Palio’s managers have a goal that is applied to each

member which is to sell more menu items than the previous day. The manager writes the goals

up on the board, where employees take their break. This is a way to get each employee involved

in a daily basis.

The second style of decision making that Palio’s leaders practice is delegate style. The

manager at the restaurant distributes power or responsibilities for making the decision within


some set of specified boundaries. Palio’s managers taught their employees how to handle certain

circumstances and have given them the power to fix issues that customers may experience. For

instance, when a customer insists that they have received the wrong order or may have forgetten

to request no tomatoes on their pizza, it is the employee’s job to make sure the customer is

satisfied. For this example, the manager has given the employee power to fix the problem. The

business has trusted the employee to represent the restaurant properly and convince the customer

to return for another visit. The manager has selective employees that are delegated powers to

achieve the company’s goal. This shows that the company and managers are willing to involve

other employees rather than just mangers and those who have higher ranks within the business.

The managers have high confidence in its employees; which is another sign that the business has

leadership effectiveness.

Mangers take big risks when distributing power, especially when it comes to hiring or

recruiting new members to join the business. The managers encourage their employees to seek

out for members who would be a great fit for the business. The managers want employees to

recruit others who may work well with the team members. Managers want the employees to do a

mini interview with the candidates. If the candidate seems like they would be a good fit for the

team, he or she is then passed up to the managers for a final interview. The final interview

determines whether or the candidate will be hired. During the last interview, it is likely that they

candidate will be hired. Managers tend to hire the candidate because they know and have trust

that the employees will aid the company in working towards the common goal. This also lets the

employees know that their voice matters.


Teams

A productive team is essential to any organization. When a team is performing well it

benefits any organization, when a team is performing badly, it negatively effects any

organization. Palio’s workers work as a team on a daily basis, to get the pizza from the oven to

the buyer’s mouth. They observably run like a well oiled machine, if they did not, it would be

detrimental to the business.

The team works in sequential interdependence; the tasks are done in a prescribed order. A

customer orders a pizza with a cashier, the cashier gives the ticket to someone who makes the

pizza, this person then puts the pizza in the oven, and someone then gets the pizza out of the

oven and puts it on a tray and preps it to take it to a customer. After the pizza is prepped another

worker gets the pizza and takes the pizza to the customer. This involves a high level of task

interdependence, but the Palio’s workers are obviously trained well and work efficiently like

this. Some other task work processes include folding pizza boxes, getting the pizza dough ready,

cleaning tables and picking up customers trash. The workers get these done in their down time

when they are not busy.

On a normal weeknight shift they have four to seven works and on the weekends the team

has ten to thirteen workers at once. On the weekends when this many people are working

together it is important that the mental models aspect of the team is prevalent. The team

members demonstrate a level of understanding about what needs to be done and what are

important aspects of the team. We also see a degree of potency within the team. Some members

are performing a variety of tasks such as running food, cleaning and being a cashier, they help

out where needed.


The workers at Palio’s provide excellent customer service. They have a goal interdepence

of providing this excellent customer service. They go out of their way and take the extra step to

please the customer. We see process gain with this excellent customer service, the workers don’t

make many mistakes and it helps to prevent process loss. Preventing process loss at Palio’s is

key because it is the difference between pizzas getting to the customers quickly or getting to

them in very slowly.

The workers play their roles very well. The cashiers are friendly and helpful while the

person cleaning the trash up is quick and tidy. The surface level diversity of the team is high,

since everyone on the team is visible to the customers. This diversity is even more apparent on

the weekends when they have thirteen people working. It is good we see a lot of diversity at

Palio’s because it encourages a diverse customer base and makes the organization look good on

the outside. It also encourages diverse ideas. It helps to prevent negative groupthink where

everyone is thinking the same way in a bad way.

While the Palio’s team does well there are still areas where they could improve. We do

see process loss in some places that causes deficiencies in the business. Some workers can be

seen socially loafing in the back part of the kitchen, this not only looks bad to the customers, it

makes Palio’s look bad, especially when they are busy. Some workers are obviously more skilled

than others so they do more to contribute to the group than others. They work the registers, cook

pizza and take food to customers. This is a good thing for weekdays when they are slow, as it

doesn’t require as many people to be working. These workers could experience motivational loss

due to feeling like they contribute too much to the group while others aren’t contributing enough.

Despite these issues, Palio’s still functions very well as a team and this is perhaps one of the

reasons as to why they are doing so well as a business.


Decision Making

According to the organizational behavior literature, decision making is a process of

generating and choosing from a set of alternatives to solve a problem. During a regular work

day, an employee’s most common problem is regarding customer complaints. These complains

are typically related to receiving the wrong order, or not receiving it in a timely manner, whether

it be in store or during deliveries. Because these problems are common, most employees have

experience and training in dealing with them. These problems require a system one thinking.

Within the two-system view, system one thinking is based on intuition. In these cases it is

appropriate to make a programmed decision. There is no need to deeply consider the solution,

because it is one that has already been decided on. Decision making becomes more difficult

when facing a problem that has not been previously encountered. This requires a Type Two

approach. This model of decision making takes more time. You have to consciously make a

choice, rather than depending solely on your gut feeling or prior experience. Because it is more

logical, it also takes more effort. However, the advantage is that less judgment errors are likely to

occur in system two thinking as a pose to system one thinking. This model of decision making

can use some intuitive system one thinking as shortcuts. For example, when dealing with a

specific customer complaint, you have probably been in a similar situation before. By using the

past situation and how that problem was handled, you can apply what you learned to the new

unknown situation. Therefore, you can skip a few steps in non-programmed decision making

process.

To make a sound decision, the first step is to identify the problem. It does not necessarily

have to apply to customer complaints, but also to all the other areas an employee or manager


holds responsibility. For example, making sure deliveries go out on time, the food gets to the

right customer, the staff is ready on time, the food is ready on time, and any other problem that

causes the workplace not to flow smoothly. When a problem arises it is important to identify it

by thoroughly examining the situation and considering all interested parties. The situation does

not get solved as properly if it gets boiled down to something that is easily understood. The later

seems like the better way, but lacking or misinterpreting information early on, can lead to

making the wrong decision. On smaller issues this might not be important, but it becomes more

relevant as the value and consequences of making the right decision increases. The next few

steps involve identifying the criteria, weighing the criteria and generating alternatives. It is

important to make a comprehensive list of alternatives and evaluate all the alternatives

simultaneously before even considering a solution. Ideally, that is how these steps should be

approached. However, usually what happens is that a few solutions that tend to be

straightforward, familiar, and similar to what is currently being done are brought up without

trying to think outside the box and coming up with perhaps new and better ways. Also, even if a

more accurate list of alternatives is formed they tend to be evaluated as soon as they are thought

up of instead of all of them being considered equally.

When dealing with customer complains, according to one of the employees, the most

common solution is to ask what the problem is and then catering to each individual customer

need. So first, they have to identify the problem. Sometimes the customer might not know what

the problem is, they just know they do not like the outcome. For example, they would like to eat

salad but it is not out yet. For them, the problem is that their needs are not met. Of course that is

also a problem for the employee, but more specifically the problem is that the food was not made

on time and they must find out why. When the employee is better able to see the depth of the


problem and identify the source correctly, the solution is much more effective and efficient.

Eliminating problems related to the processes in the workplace eliminates a majority of the

customer’s problems. Every customer is different and so it is difficult to choose one generic

answer for all their problems. That is why it is important to consider all the alternative and even

more important is to use accurate information to evaluate the alternatives.

Motivation

Motivation is defined as "a set of energetic forces that originates both within and outside

an employee, initiates work-related effort, and determines its direction, intensity, and

persistence" (Colquitt,164). While our group visited and observed Palio’s Pizza Café in

Richardson we did not witness any employees exhibiting any signs of motivational loss.

However, after speaking to the manager Mark, we came to the conclusion that there was room

for improvement in the processes used to convey employee motivation from the management

level down.

Marc Poulain and the management at this location have done a great job of setting goals

for their restaurant and effectively communicating them to the lower level employees. Marc said

that there are long term and short term goals that have been put in place, and that the restaurants

goals are clearly expressed on a bulletin board in the back room for employees see. This is an

effective way to get employees to understand what outcomes are expected of the restaurant and

is used as a motivational tool to help push employees towards a common goal.

The goals that are set for Palio’s employees are known as S.M.A.R.T., "which stands for

specific, measurable, achievable, result-based, and time-sensitive goals" (Colquitt, 175) Mac

stated that they set their sales quotas based on what volume they sold the previous year, making

it achievable. They expected at least a double-digit sales increase every day, making it


measurable. And the goals varied on day-to-day bases, making it time sensitive and result-based.

Having daily goals like this allows the employees to see a finish line and motivates them to strive

for the results that are expected of them.

After discussing goals with Marc Poulain and getting an understanding for what kind of

results are expected of their employees, we found that even though the employees are given

quotas to meet. They do not get compensated or rewarded for when they perform well. This can

result in a loss of employee motivation, and concern for this was expresses by Marc himself. He

said that the idea behind rewarding employees for performing well can increase employee

motivation, because without them employees can become stagnant and unmotivated. This raises

a high level of concern considering that there is very little upward lateral movement between

employees. Marc stated that the only way for someone to move up in the chain would be through

a vacancy that needs to be filled up. The combination of little reward and the low possibility to

move up in the company can result in a loss of employee motivation. We were not able to find a

current example of this, but there are changes that can be made to prevent any future problems

from happening.

Another red flag that went up when asking questions related to motivation in the

organization was that Marc said that they did not have a mission statement put in place. Before I

could comment he stated that not having a mission statement does bother him and that he wishes

for there to be one. Mission statements are key to keeping the company on track, understanding

company goals, and help guide decision-making. It was clear that Marc had some kind of

understanding of this because of his discomfort expressed with not having one.


Recommendations

While Palio’s has many redeeming qualities there are still areas where improvement is

needed. In order for a company to grow, there should be constantly trying to improve themselves

and think of ways to make the customers experience better. The first recommendation is to have

dedicated workers that help the customers, similar to waiters. Customers seem to be confused

when they realize no one is going to assist them to their seat. Palio’s takes more of a fast food

approach on their dine in side. The second recommendation is for the managers and company to

enhance their way of showing appreciation to their employees. This will improve the employees

motivation as well as the job performances. Our final recommendation would be for to assist

Palio’s to expand. Due to opinions from competing Palio’s it can be very confusing for potential

customers to dine here. The business can make improvement on implementing set processes for

decision making.

Upon walking into Palio’s, one realizes they must order from the counter and go sit down

and get their own drinks, similar to a fast food restaurant. This is confusing for customers

because Palio’s presents themselves as an upscale pizza place. The price point of the pizza would

make one think they would have a waiter. Upon reading reviews online many customers are

complaining about this and the oddness. When observing customers, it was apparent that the

customers look confused when they realized that they didn't have a waiter. The workers attempt

to help the customers when they can, but it depends on how busy they are. We recommend

creating a hybrid position within the organization similar to a waiter. The customer would still

walk in and order their pizza but this person would then help the customer after that. They would

bring the pizza to the customer, get the customer drinks, and help with any questions they may


have. They would bridge the service that Palio’s seemed to be missing and would ensure

customers overall happiness.

This position would take strain off of the other workers at peak times. They would make it

so the other workers don’t have to clean tables as much. Other workers wouldn’t have to answer

as many questions. This is where process gain may be seen, the other workers would be able to

focus on their tasks at hand, and not have as much to do. A process loss was observed when

other workers had to help out with customers and couldn’t focus on the tasks they were assigned.

In the end, this position would increase customer satisfaction and improve the business overall.

To increase the motivation and employees job satisfaction, rewards may come in handy

for Palio’s Pizza Cafe. The business wishes to reward employees with bonuses for their extra

work but are limited because of their budget. There are different ways to show appreciation for

an employee such as taking some time off or discounts when purposing menu items from the

business. Considering that Palio’s is a new business and is limited on the budget, it may be best

to offer free lunch as an award for those who show excellent customer service. Having little

perks like that for employees speaks volume. The employees will feel that they are appreciated,

the job performance will enhance the compay and its reputation, and customers will return

because of their experience. This chain of reaction is a win-win for all who is involved.

Although this particular Palio’s is experiencing success there are still negative stigmas

stimulated about different Palio’s around the metroplex. These stigmas can be generated in a

multitude of ways, the primary method being customer reviews. Being that the original owner of

Palio’s had no interest in franchising, new owners that wish to associate with the brand pay

solely for the name of the company. Therefore, there are numerous ways to operate this

particular restaurant. The method that this particular Palio’s chooses to operate in may be


completely different from another in a different location. This can affect this particular Palio’s in

a positive or negative manner all of which depends on how the customer views a particular

restaurant.

Since the average person thinks that Palio’s is a restaurant chain, service a customer

receives in one Palio’s becomes synonymous in another. Thus, it is imperative that Palio’s look

to distinguish their brand and or attitude as a company from its direct competitors. Palio’s should

look to build a conglomerate that distinctly sets them apart from other Palio’s. This process can

start with the opening of one store or even the building of a company that poaches Palio’s around

the metroplex to ensure that each location shares the same vision. There are numerous benefits

that would accompany this shift in vision as a company the most important being the visual

perception of the company in the customer’s mind. The next step that this particular Palio’s

needs to take would be to formalize this restaurant’s standards and foster its ideas into a

multitude of Palio’s restaurants around the metroplex. The formalization of this restaurant would

in fact protect this particular restaurant’s identity without making it notorious for other Palio’s

blunders.

Recommendation

The basic assumptions in decision making are that the employees or managers perfectly

defined the problem. Then, the individual identified the criteria and all possible and relevant

alternatives. Also, that all the alternatives were accurately assessed and the alternative with the

highest value was chosen. All the mistakes in decision making that have been previously

discussed are cased because of this concept called bounded rationality. This states that because

there is a lack of information we tend to “satisfice”, or settle for the first acceptable solution.


When customers have complaints, instead of answering fully on intuition, it is important to let

system one thinking and system two thinking to compliment and control each other.

Decisions should be made with reason but according to the literature, system one

thinking tends to be very accurate. There are also some decision making biases. These are related

to faulty or selective perception. Sometimes it is hard to understand what the customer actually

needs because you can only see what you want to see. To avoid making this mistake focus on

listening objectively to what the customers have to say. There are also mistakes made in

judgment when there is projection bias. Just because people tend to believe that others think, feel

and act the same way that they do. A solution to a customer problem may seem great for you but

the customer might not feel the same way. To make sure there is optimal customer satisfaction,

once you have chosen an alternative, convey your solution to the customer and make sure it fits

their needs as well. Overall, decision making has been discussed in a way to better handle

customer complaints. As I have mentioned before, it can be applied to any other decision that

needs to be made, not only in the workplace but also in all other areas of life.

Documents

Palio s Pizza Café Richardson, Texas 1 - Weeblynaomimasangu.weebly.com/uploads/5/6/9/0/56902775/obhr_palio_paper.pdf · Palio’s Pizza Café – Richardson, Texas 2 Palio’s Pizza