Chipotle profits by investing in employees

The Chipotle Mexican-style restaurant chain enjoys good profits and good growth, while paying its employees generously and promoting from within.

220px-Chipotle_Brandon_Its current policy began about nine years ago when founder Steve Ells and then-COO Monty Moran visited the restaurants, and notice that the one that were best-run were all managed by employees who had started as restaurant crew members and worked their way up.

They decided to make that into a system, and reward restaurant managers, not for achieving set targets of holding wages and other costs down, but for mentoring employees and training them to be managers.

Click to enlarge.

Click to enlarge.

Why do so many managers ignore the examples of Chipotle, Costco and other companies and instead grind their employees down instead of building them up?  

I am reminding of a saying Bertrand Russell once made about human nature, When people are mistaken as to what is in their interest, the course they believe to be wise is more harmful to others than the course that really is wise.

LINKS

http://qz.com/183224/how-chipotle-transformed-itself-by-upending-its-approach-to-management/

http://www.businessinsider.com/companies-need-to-pay-people-more-2014-3

[Update 4/19/14]

Then again, maybe Chipotle is no more than the best of a bad lot.

Click on the following link for another view.

View at Medium.com

I think Chipotle’s management probably is well-intentioned.  I also think that no matter what the corporate policy, workers should have the protection of minimum wage laws and of labor union contracts..

Tags: , , ,

3 Responses to “Chipotle profits by investing in employees”

  1. thebusinessdude Says:

    Some of the best resources we have are human, which in the long run, can be quite costly with significant turnover. Investing, and grooming for the next career move not only helps keep your promotion list healthy but keeps years of knowledge and skill close.

    Like

  2. Notes To Ponder Says:

    I’ve spent the last 30 years in the hospitality industry and couldn’t agree more. I’ve worked for or witnessed every management approach imaginable. It’s a tough business where exploitation runs rampant and employees are viewed as dispensable. Great post.

    Like

  3. tiffany267 Says:

    Chipotle is also a great company for sourcing fresher, more local foods for better quality and of course sustainability. I wonder if that decision also makes them money due to lower shipping costs?

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.


%d bloggers like this: