One reality that you must face as a bar owner is the fact that none of your employees will ever be as invested in the success of your business as you are. Without a financial stake in the business, it’s virtually impossible to expect employees to share your same commitment and investment. However, you can take actions to encourage your staff to have a greater level of investment than they currently do, and this can pay big dividends for the success of your bar.

When you work with Bar-i, you will receive highly accurate, detailed data regarding the performance of your bar. However, the value of this data largely depends on what you do with it. If you don’t take action based on this information, then you won’t see much improvement in the success of your bar’s operations.

The biggest difference between Bar-i’s average clients and our best performing clients is how actively they use the data generated by their bar inventory efforts. If you use this data to guide your strategy and actions, it can have a significant impact on your bar’s performance and help you maximize profitability.

You should definitely be using this data to assess the performance of every product you sell at your bar and regularly make necessary adjustments to your processes to improve this performance. But you can also use this data to create an incentive program for your staff that will ensure they take more responsibility for the success of your bar. 

Reduce Shrinkage by Putting Responsibility for Results in the Hands of Your Employees

Normally, the responsibility for the success of the bar falls on the owners and managers. When your bar isn’t doing well, it often results in an endless cycle of staff meetings and trainings that become frustrating for managers and staff members alike. However, a more effective way to ensure optimal performance is to put the responsibility for the bar’s success in the hands of the staff. You can accomplish this by creating an incentive program that makes your staff want to work towards your goal of optimal performance and profitability.

Our best clients consistently achieve accountability scores of 97% or higher. In other words, 97% or more of drinks poured were rung into your POS system. This high level of accountability also helps ensure your liquor cost remains at a reasonable level.

If you’re thinking that this figure is unreasonably high, then ask yourself why? What are the barriers to achieving 97% accountability? If it’s a lack of data, then Bar-i can help arm you with all the information you need to achieve this level of performance. If you already have the information necessary to achieve this goal and you’re still missing the mark, then you most likely need to raise the level of investment among your staff. Fortunately, there’s an easy way to do this.

Creating Your Incentive Program

The two most powerful rewards you can use to impact the performance of your bartenders are:

1. Free booze – This comes in the form of shift drinks. Shift drinks are a great incentive because it’s something that’s valued by your staff members. By framing shift drinks as a privilege that is earned instead of something that is simply their right after a shift, you can set a tone where shift drinks become a reward for doing a good job.Shift drinks can also be a powerful tool for staff bonding. Allowing your bar staff to enjoy one or two drinks together after a long shift can improve camaraderie and teamwork. Ultimately, this will help you build a tight knit staff that works hard and takes pride in providing good service to your customers.
2. The ability to make more money – A generous comping policy will help your bartenders make better tips. As a result, the size of a bartender’s comp tab can be a very powerful incentive. However, this is definitely a privilege that should be earned. Otherwise, your bartenders are simply giving away your drinks to improve their nightly tips, and this is exactly the kind of behavior that you’re trying to eliminate by setting a standard of 97% accountability.

When creating your incentive program, it’s best to discuss the policy and establish the “rules of the game” together with your staff. This will help improve employee buy-in. The following tips will help you set up and implement your incentive program:

1. Set expectations and agree on the “rules of the game” – Clearly set the expectation with your staff that high results are the goal everyone is striving to achieve and that when these goals are met, the staff will be rewarded with extra privileges.It’s always important to frame these incentives as privileges or rewards that are earned for achieving the established standards. You don’t want the loss of these privileges to be viewed as punishment since positive reinforcement is much more powerful than negative reinforcement.
2. Write up the rules and post them for everyone to see – You always want to make sure the incentive policy has been clearly communicated to the entire staff and that everyone understands the rules. This is best accomplished by keeping the rules posted.
3. Consistently follow the rewards schedule – This is extremely important. The rewards schedule provides your staff with the proper incentive to work towards achieving the high results you’ve established. If you fail to consistently give your staff the rewards they’ve earned or reduce these privileges for subpar performance, they won’t serve as a very powerful incentive.

Example of a Strong Incentive Program

The following chart provides you with an example of a good starting point for your incentive program. Keep in mind that these metrics and rewards are just an example. You should customize the program to suit the needs of your bar.

For example, you may decide that the accountability performance targets should be slightly modified based on your business model. You may also find that some of our sample rewards may not be appropriate to include in your program. This may be particularly true of comp tab rewards at a corporate establishment that has a strict comping policy or shift drink rewards if you don't permit your staff to drink at the bar after their shifts. 

If you think that setting 93% accountability as part of the low-performance tier sounds harsh, keep in mind that it means more than 1 out of every 14 drinks isn’t being rung in. This can be very damaging to your profits and as a result, you should always strive for higher accountability than this 93% level.

This doesn’t mean that you shouldn’t give away drinks on occasion. In fact, comping a drink for a regular from time to time can be an effective way to express your appreciation for their repeat business. However, it’s important that your bar staff always accounts for these drinks on a comp tab.

Here are some final thoughts to consider before implementing an incentive system like this:

1. Make sure you involve your employees in the process of designing your incentive program. If your employees are involved in discussing the specifics of the rewards, it may help them to understand the system better and this generally results in greater buy-in.
2. Before discussing these rewards with your staff, do some number crunching so that you have an idea of what you can reasonably give away as a reward without eating into your profits too much.
3. The use of pouring practice can be an effective way to improve the consistency of your bartender’s drinks if you notice that too much of your product isn’t being accounted for in your bar inventory data. Weekly pouring practice should be sufficient in the medium tier, but if your bar’s performance drops into the lower tier, daily pre-shift pouring practice can be an effective way to get your staff thinking about their pours every night.
4. In general, we don’t recommend using jiggers unless your bartenders are making craft cocktails that require lots of ingredients poured in small amounts. However, if your results are consistently poor, then you may want to require your bartenders to use jiggers with standard pour sizes as well. This will force your bartenders to slow down and think about what they’re pouring, which can improve your results quickly.
5. Poor results can often occur when your bartenders are rushing. By adding another bartender for busy nights, it can help reduce the need to rush and improve results. However, this will also split the tip pool by one additional person, making it an unpopular decision with your bartenders. If you experience backlash about this reduction in tips due to greater staffing, try to spin your decision in a way that motivates your bar staff to improve their performance so that you can confidently return to a smaller staff on these busy nights.
6. You should use additional bar cleaning sessions and staff meetings judiciously. You don’t want to focus on punishments since the point of this program is to provide your staff with a greater incentive to perform their job well. That being said, you need to take action when things aren’t going well at your bar, and meetings and cleanings can be helpful in getting your staff focused on the necessary details to improve their performance and keep the bar running well.
7. We’ve seen good success when managers interview staff members individually. This can often reveal a lot more information about what’s going wrong than can be achieved in a large group meeting.

When correctly implemented, this incentive system can lead to the dual benefit of higher results and less time spent by your management team babysitting your staff. Ultimately, this can have a powerful impact on your bar’s performance.

To learn more about this 3-tiered incentive program or to find out how we can streamline your inventory processes and help you maximize profits, please contact Bar-i today to schedule a free consultation. We serve clients nationwide from our offices in Denver, Colorado.