Putting the Service Profit Chain to Work: Panera Bread

Putting the Service Profit Chain to Work: Panera Bread
Student’s Name
Institution
Course Number and Name
Instructor’s Name
Date
Putting the Service Profit Chain to Work: Panera Bread
The service profit chain is a business concept that ties a company’s profitability to employee and customer satisfaction (Heskett et al., 2008). It requires focusing on creating value for customers and meeting the needs of employees to increase customer and employee loyalty and satisfaction. In this chain, internal service quality drive employee satisfaction, and this drives employee retention and productivity (Heskett et al., 2008). Employee retention and productivity drive external service value, which then drives customer satisfaction and loyalty. Customer loyalty drives revenue generation and profitability. Companies that are not faring well with employee retention can benefit from this chain because it would not only help improve employee retention but also increase profitability. One company that should follow this approach is Panera Bread. This paper explores the service issues Panera Bread is facing and provides recommendations on how it can improve based on the service profit chain concepts.
Panera Bread: A Brief Overview
Panera Bread is an American bakery and café chain that operates in the United States and Canada (Panera Bread, n.d.). The company has a wide menu that includes bakery products, sandwiches, salads, soups, pizza, and beverages, among others. The company is a renowned fast-food chain with a menu that is constantly changing to match customer needs.
Comments
In recent years, the company has experienced high staff turnover. According to Rosenbaum (2019), Panera Bread experiences a staff turnover of 100% every year. High staff turnovers are costly to businesses. According to Heskett et al. (2008), high staff turnover is associated with a decline in organizational productivity and customer satisfaction. High staff turnover also means that the company will incur more costs of recruiting and training new employees to fill the vacant positions. Ultimately, these issues affect an organization’s revenues and profits. High staff turnover is an indication of underlying issues within the organization. At Panera Bread, high staff turnover is associated with poor management, a lack of employee recognition, conflicts among catering crews, and understaffing (Cain, 2019). This has contributed to high employee dissatisfaction with the food chain.
Also, Panera bread has a wide menu that keeps changing and this can be quite confusing not only to employees but also to customers. According to Miller (2020), employees at Panera Bread have to keep studying the menu to keep up with the changes. Some even carry the menu home or study it during their spare time. Failure to understand the menu affects their customer services. Customers might ask for something that is no longer on the menu and employees have to offer them substitutes quickly. Going back to read the menu board while the customer is waiting in line is time-consuming and can contribute to customer dissatisfaction (Miller, 2020).
Service Audit
Panera Bread would not pass the service audit in several areas:
Leadership
Leadership is an important part of the service profit chain. According to Heskett et al. (2008), organizations that have a successful service profit chain have a favorable culture characterized by leaders who care about their people and are willing to listen not just to customers but also to employees. However, Panera Bread leadership has not created a favorable work environment for its employees. About 50% of the recent reviews on Indeed (n.d.)indicate that employees are unsatisfied with the management and cite various issues ranging from lack of support, inconsistency in their management practices, and failure of the management to listen to employees' complaints. Also, Comparably (n.d.), indicates that 50% of Panera Bread employees indicate that the work environment is negative. This can be attributed to the fact that most employees find the management unresponsive to their needs.
Internal Service Quality
One of the things to look at in a service audit is internal se...