You are on page 1of 16



A Case Study Paper Presented to

The Faculty Committee of the School of Hospitality and Tourism Management

Arellano University Pasig

In Partial Fulfillment of the Requirements of

The Degree of Bachelor of Science in Hotel and Restaurant Management

By: Angelo M. Espiritu

March 2019

Title: Inadequate number of employees serving the target market: A case study of Hap Chan

Restaurant C – Raymundo Branch in Pasig City

No. of Pages:

Researcher:Angelo M. Espiritu

Adviser:Professor Annie Herbolario

Degree Conferred:

School:Arellano University - Pasig


According to Mary Nestor-Harper, 12 years as a human-resources director and

more than 19 years’ experience as an HR/management consultant who published in

"Training Magazine," and "The Savannah Morning News" – “Forecasting staffing needs

is an element of strategic planning. Staffing levels affect many aspects of a business. Too

many employees drive up overhead and directly affect business profitability. Too few

employees limit the ability to serve current customers and grow the business.

Understaffing may make sense to the management team but have negative impact in the

long run”.

Hap Chan Teahouse is a showcase of the superior food quality and friendly

neighborhood service of the authentic Hong Kong Tea house. Starting out in 1997 as a

small tea house in Manila, and serving only the Filipino-Chinese favorites: Mami, congee

and dim sum. It began franchising its restaurant chain in 1999 through Hap Chan Trading

and Management Corporation and has slowly grown its menu.This case study seeks to

answer the following questions. Why do employers cut down employees despite of its

needs of adequate man power? How this dilemma affects its regular employees in facing

this kind of problem and its impact in delivering good customer satisfaction in serving the

target market of Hap Chan Restaurant C – Raymundo Branch in Pasig City.

Both product and service quality suffer when fewer employees are available to

serve customers especially in the food service industry. A small number of employees

must work rapidly in order to handle a higher volume of work, and errors increase when
quotas are stressed over quality. Employees may be rushed through training or begin

working without training to ease the workload. Poor quality over time decreases a

company’s reputation and drives away customers. Many companies cut down their

employees in order for them to reduce payroll and benefit costs, however, fewer

employees who now have to work overtime can be more expensive than hiring additional

full-time staff. The time regular employees spend training temporary staff and correcting

errors reduces productivity. Replacing temporary workers repeats the expensive hire-and-

train process.Inadequate number of employees serving the target market of Hap Chan

Restaurant will cover its entire effect to its employees and target market and what needs

to be done in order to address this kind of problem. Also, the gathered responses of its

employees and customers who are constantly engage in this problem.

This study aims to help Hap Chan Restaurant and the management in assessing

the quality of service provided and draw plans on meeting the customer’s needs and

satisfaction as well as providing an in-depth understanding on the importance of adequate

number employees, the pros and cons of inadequate number of employees serving the

target market to achieve a positive customer experience and at the same time this will

surely help for the growth of the company and its people.

The human resources aspect of a business is often its largest asset. This

substantial investment of people requires an equally significant approach to manage it.

Having a strategic plan for your staffing needs and decisions allows you to organize and

account for demands in personnel while keeping organizational goals and vision in the

forefront. Likewise, a strategic staffing plan aligns your company objectives with the

amount and type of personnel you need to obtain and sustain for those objectives (Carrie,

2008). Human resource professionals cite staffing as the top critical function in their role,

according to the Society for Human Resource Management. To maintain a competitive

edge, HR professionals align talent acquisition with attractive benefits and compensation

to attract the top talent in the industry. This enables them to develop a strategic workforce

plan that meets business requirements. HR staffing issues usually involve deciding

whether to hire, outsource or eliminate (Duggan, 2019).Strategic staffing processes, also

known as workforce planning, provide you with a strategy to make certain that you have

an appropriate number of people with the right skill sets for your current and future

business goals. As you grow your business, using one or more of the four staffing

processes can help your business run more efficiently (Lynn, 1998).The first step to

strategic staffing is identifying needs. Assess what positions are crucial to the company's

overall functions. Distinguish between needs and wants. After critical positions are filled,

you can move on to ancillary posts. After you have pinpointed your needs, evaluate the

means to fill those positions. Depending on your financial situation, you may need to add,

remove or combine positions. Allocate the most time and money toward key staffing
needs first and move on from there (Carabelli, 2003).According to

(2016)…, an element of strategic planning within an organization is to utilize forecasting

to determine staffing needs. This requires looking at current and future needs and

aligning a process with business goals.

Organizational staffing is the process of hiring people based on the specific

responsibilities they will have in the organization. The staffing priorities are based on the

results the organization wants to achieve. Staffing in this way is advantageous in some

instances, but there are also drawbacks to the organizational staffing process

(Thibodeaux, 2019).The decisions you make about staffing your business can have

dramatic effects on the quality of your work, your retention rates and level of customer

service. Production and goals are at risk. Making appropriate staffing decisions is one of

the most important tasks for a manager or small business owner (Ray, 2019).Identifying

the needs of the company represents an important part of developing a staffing plan. This

can be accomplished by developing job descriptions to lay out the positions needed

within the company to meet various responsibilities. Continual communication with

employees within the organization can help you identify any shortcomings among the

staff. This continual feedback also helps identify the need to hire additional employees to

ensure the work is completed in an efficient manner without putting excessive strain on

your current employees (Long, 2019).Hiring enough people to efficiently run your

business will make customers feel like you respect their time and are committed to giving

them efficient, timely service. Even the best employees won’t perform to their full

potential if they are overworked or are trying to do the job of several people, which can
lead to irritability and impatience with both employees and customers. Evaluating your

staffing needs and making sure you have enough trained professionals in place to cover

regular shifts will help you deliver smooth, customer-friendly service(McQuerrey, 2018).

Developing an effective staffing strategy can keep your company out of bankruptcy.

Researching employment trends, workforce data and using current employment data to

create staffing models can ensure your business is productive and, ultimately, profitable

(Mayhew, 1995).Identify gaps within the organization. Determine if critical needs exist

that are not being met with current staffing levels or if any skill sets are needed which are

not possessed by any current employees of the company. Assess if the gaps can be filled

with internal actions such as transfers and cross training or whether external recruitment

efforts will be needed (Benjamin, 2008). Staffing plan is a well-thought-out road map for

ensuring your company is fully staffed, with the long-term goal of avoiding downtime or

loss in production due to retirement or other staff turnover. Staffing plans tend to vary

from one company to the next, depending on industry, size of the organization and

anticipated growth. There is no one-size-fits-all approach to help you effectively staff

your business, but with careful planning and research, it is possible to have a pipeline of

talent ready to step in and fill vacancies as they occur (Peterson, 2007). The rule of

thumb method of calculating staffing needs is based on general organizational structure.

For example, if the organization has set up its structure to have one operations manager

per five line supervisors, then short term staffing will include keeping the same number

of supervisors when there is turnover. Long term staffing will include planning five

supervisors for every manager added. The rule of thumb calculation is not exacting or
based on in-depth analysis, but on maintaining the organizational structure (Cardenas,


Measuring employee productivity is a difficult task for small businesses.

Journalist Saheli S.R. Datta points out in CNN Money, "The standard economic measure

of productivity--dividing company revenue by number of employees--won't help you

make operational improvements. Nor can you simply count the widgets they ship per

week, as factory managers do."But methods do exist for measuring your small business's

employee productivity. With a little creativity and number crunching, you will be able to

put numbers to everyday operation (Richason IV, 2019).Efficiency is measured by

dividing a worker's actual output rate by the standard output rate and multiplying the

outcome by 100 percent. The standard output rate is a worker's normal rate of

performance or the volume of work a trained employee can produce per unit of time

using a prescribed method and with the usual effort and skills. As production efficiency

increases, production costs go down. The operations strategy, technology, job design and

process influence the rate of output as does the worker's skill and effort (Nordmeyer,

2018). Cutting back on staff levels may seem like an easy way to save the business

money, but be careful of running the risk of this only looking good on your balance

sheet for that particular month. The real repercussion of severely shrinking the size

of your workforce has a huge negative impact on your people (Ben, 2018). Handling

multiple jobs to compensate for understaffing not only increases an employee's workload,

but the additional responsibilities can intensify stress. This can happen if personnel aren't

familiar with their new responsibilities or when new duties prove too challenging. In
addition, employees might feel that others aren't pulling their weight to keep the

operation running smoothly. Heightened stress levels can cause dissension within the

organization and decrease productivity (Higuera, 2019).Is it aligned with the company's

strategy?" In a time of rapidly shifting corporate strategy, it's essential to regularly

reevaluate individual and team goals to ensure that each still maps to those of the

company (Michelman, 2003.The incentive can come in many forms. When you really

need your short-staffed team to pull something out of the bag, you could offer a financial

bonus to all staff that meet their objectives, or if the company as a whole meets certain

targets (Jones, 2017).

Keeping the right balance of long- and short-term staff is a key element of

running a successful and cost-effective business in today's market. With bottom lines

rising and profit margins shrinking for all but the largest businesses, the careful

management of each position on the payroll is essential to survival in many cases. The

proper blend of full-time, temp and freelance employees can help cover all of your

staffing needs while keeping costs down (Morello, 2002). Controlling labor costs

presents a significant financial challenge to small business owners. There must be enough

employees scheduled to serve customers and complete the company's work objectives,

but not so many that it drives up production costs unnecessarily or makes the product or

service too costly. Skilled owners and managers learn the art of demand forecasting so

they can accurately calculate manpower requirements and schedule the correct number of

employees -- neither too few to get the job done nor so many that costs are out of control

(Redman, 1985).For many businesses, including most small businesses, the most
significant cost is labor. Salaries and wages comprise the major line-item expense for

most retail and small-scale manufacturing companies, but labor also tends to be

responsive to productivity improvements. To reduce labor costs, entrepreneurs should

consider measuring employee efficiency and setting aggressive performance targets to get

the most bang for their labor buck (Gillikin, 2018). According to

(2016)…,one way to immediately reduce payroll and benefit costs is to cut your staffing

levels. However, if this leaves departments with too few employees for tasks and

projects, you will need to look at alternative staffing options to fill positions sooner rather

than later.Most businesses experience periods of economic down time. During these

times, lots of employers cut back on staffing to save funds and stay in business.

Unfortunately, prolonged understaffing can lead to a variety of issues that can greatly

harm a small business. Company managers should be conscious of the problems that

occur when the workforce is reduced so they can weigh the pros and cons of keeping

their enterprise short-staffed (Mooney, 2019). Understaffing can be a problem in any

professional workplace, particularly in hospitality industry where service and quality may

be compromised as a result. From time to time we all find ourselves in situations like this,

but when the odd occasion starts to become the norm you have to ask yourself: does

management know, or are they totally oblivious to what is actually going on in their

facility?(Lampert, 2016). Individuals working in understaffed groups would experience

higher levels of perceived task scope and utilization of skills, and that these task

perceptions would lead to higher levels of organizational commitment and work

performance. However, understaffing was associated with lower levels of group

performance. We suggest that these findings have important implications for

organizations and departments that are considering structural downsizing (Ganster,

1995). An understaffed business misses growth opportunities because it lacks the

capacity to meet customer needs. If a business takes on new clients or products and can’t

deliver the goods or services, it can lose the business and damage its reputation in the

industry. Lost business means lost revenue and growth into new markets. A business

should weigh the cost of an employee against the amount of revenue generated by that

employee’s contribution to the organization (Harper, 2019). Tunesi (2014) says “I would

say, generally speaking, organizations’ operational departments are heavily understaffed

while their service departments—e.g., accounting, human resources, IT, and

engineering—are largely overstaffed. Such an imbalance creates demotivated people and

internal conflicts”. An understaffed company lacks sufficient employees to cover the

regular workload and complete job tasks efficiently. In some cases, understaffing is the

result of challenges in finding suitable workers, but in others it's intentional due to cost-

cutting measures. Regardless of the reason, though, understaffing's burden falls mostly on

the shoulders of the existing workers, who must take up the slack (Balle, 2017).

This study look to the problem in “Inadequate number of employees serving the

target market: A case study of Hap Chan Restaurant C – Raymundo Branch in Pasig

City” that results to stress or pressure at work to its employees which greatly affects

service quality towards its customers. This case study seeks to answer why employers cut

down employees despite of its needs of adequate man power and how does employees

cope up with this problem. Both product and service quality suffer when fewer

employees are available to serve customers especially in the food service industry.This

study aims to help Hap Chan Restaurant and the management in assessing the quality of

service provided and draw plans on meeting the customer’s needs and satisfaction as well

as providing an in-depth understanding on the importance of adequate number of

employees that will surely help for the growth of the company and its people.

This study uses a qualitative type of approach which provides a complete and

detailed description of a subject without limiting the scope of the respondent’s answers

(Collis & Hussey, 2003). Descriptive research was used which seeks to describe the

characteristics or behavior of an audience. While it’s not grounded in statistics, and

usually leans towards more qualitative methods. The most familiar method of descriptive

research, surveys involve interviews or discussions with larger audiences and are often

conducted on more specific topics (McNeill, 2018). Basically, the data is in word or

narrative form, and it is subjective depending on the respondent’s point of view about a

subject (Langkos, 2014). Participants were fully informed regarding the objectives of the

study by presenting a letter to conduct a survey signed by the manager on duty, while

they were reassured that their answers were treated as confidential and used only for

academic purposes and only for the purposes of the particular research.The size of the

sample was relatively 9 participants which is 90 percent of the total population. The

method of purposive sampling was used to develop the sample of the research under

discussion. According to this method, which belongs to the category of non-probability

sampling techniques, sample members are selected on the basis of their knowledge,

relationships and expertise regarding a research subject (Freedman et al., 2007).

Purposive sampling technique (also known as judgment, selective or subjective sampling)

in which researcher relies on his or her own judgment when choosing members of

population to participate in the study. Purposive sampling method may prove to be

effective when only limited numbers of people can serve as primary data sources due to
the nature of research design and aims and objectives (Dudovskiy, 2018). In the current

study, the participants who were selected had special relationship with the case

under investigation, sufficient and relevant work experience in the field of hospitality

and active involvement in service industry. The researcher may use his/her own

judgment in order to choose senior level manager/s and employees who are active and

currently working in the field of study who could particulate in in-depth interviews.

Some sample questions that were included in the semi-structured open ended

questionnaire were the following:

Employee Questionnaires

Question 1.Do you prefer to work independently or on a team? Why?

Question 2.Could you tell us a scenario where your service was compromise due to


Question 3.How does your company manage customer complaints? Explain briefly what

have you done to resolve the issue?

Question 4. How does your company operate during basic days?

Question 5. Could you tell us about your positive or negative experience with your

company so far?

Question 6. Share with us your recent problems in terms of understaffing?

Question 7. Do you feel any stress or pressure at work as far as understaffing is


Manager Questionnaires

Question 8. Do you have adequate manpower to run the operation?

Question 9.Are you having any difficulty in delivering your target every day?

Question 10.Do you have sufficient employees to cover the regular workload and

complete job tasks efficiently?

Question 11. What can you suggest to deliver a service quality despite of having

inadequate number of employees?

Question 12.How does inadequate number of employees affect your operation?

Question 13. How does understaffing affect your performance individually or as a


Question 14. Do you think long term staffing would help to run your operations


Question 15.What was the company's biggest challenge recently and how did you learn

from it?
In some cases participants may refused to speak against their organizations. Personal

interviews were conducted with the manager on duty and workers directly involved in the

daily operations. The interviews were semi-structured Standardized, open-ended

interview which means to say that some questions were prepared to guide the researchers

and to avoid the risk of departing from the established objective of the interview and to

give flexibility to the flow of the interview. Furthermore, the interviews were

documented using an audio recorder and diaries.

This study look to the problem in “Inadequate number of employees serving the

target market: A case study of Hap Chan Restaurant C – Raymundo Branch in Pasig

City” that results to stress or pressure at work to its employees which greatly affects

service quality towards its customers. This case study seeks to answer why employers cut

down employees despite of its needs of adequate man power and how does employees

cope up with this problem. The result of this study will be further discussed under the

discussion chapter of the study.