Please read the following document and compose responses to the questions at the end of the document.

Please read the following document and compose responses to the questions at the end of the document.

Question 2 asks you to research the concept of mystery shopping overall. 
Questions 1, 3, 4, 5 are directly related to the information presented in the document.

Abstract 
This document invites students to put themselves in the shoes of Delia, the company HR specialist responsible for the implementation of mystery shopping at Salsa, a chain restaurant. Students will have the opportunity to discuss the negative impact of this new performance appraisal system on employee morale. Salsa, located in the state of Florida, USA, decided to improve the quality of its customer service by implementing mystery shopping. Six months after this practice was implemented, the quality of customer service has slightly increased. At the same time, employees have grown increasingly unhappy with the practice. First, employees feel the company implemented mystery shopping to spy on them, so their trust in the restaurant management and corporate leadership has decreased. Second, employees of three service areas, kitchen, cashiers, and dining, do not like being evaluated as one big team and thought the old system that used separate criteria for each service area was fair. Third, the company did not provide a formal process for employees to appeal the results, ask questions, or provide suggestions related to the new practice. Observing the situation from Delia’s perspective, students will search for possible solutions to improve this situation.
The Company 
Salsa (pseudonym) is a U.S. restaurant chain that has been serving Caribbean-inspired food for its customers since the mid-1980s in the state of Florida. Salsa is proud of its original recipes, created and finessed by the company’s chefs through many trips to countries in the Caribbean. This cuisine is a flavorful mix of European, African, and Cajun traditions—typical dishes include a slow roasted oxtail stew, spicy jerk chicken, goat in curry source salad, sweet plantains, and beef empanadas with coconut water. Both meat lovers and vegetarians can find a great variety of dishes, all being made with fine, fresh, and delicious ingredients. Most dishes are baked, grilled, or sautéed to support the customers’ healthy lifestyle choices. Salsa takes pride in its simple, affordable, and tasty food, which is cooked in an open kitchen so that customers know their dishes are fresh from the oven. The company does not use microwaves or prepackaged and precooked food. Customers have many options in terms of the dish size and the number of sides. They can enjoy their meals in the restaurant, use the drive-through option, or order delivery. Salsa also provides catering services for different events and celebrations. Salsa does not serve alcoholic beverages and positions itself as a family oriented fast-food restaurant. 
Delia’s Task 
Since its beginning, Salsa has been very popular in South Florida where the majority of the population has roots in the Caribbean, including the Bahamas, Cuba, Dominican Republic, Venezuela, Haiti, Jamaica, Puerto Rico, Trinidad and Tobago, and more than two dozen other countries. Three years ago, the company decided to expand, and opened 30 restaurants in several states, such as Georgia, Texas, and Louisiana. 
Unfortunately, this strategy failed. Neither the taste nor the style of Salsa cuisine appealed to customers in those states. The company decided to close most of the restaurants outside Florida. The new strategy is to focus on its core customers—residents of South Florida—by opening more restaurants, providing new menu items, and increasing the quality of customer service. 
Delia was put in charge of improvements in customer service. She has worked at Salsa for the past 10 years. She started as a restaurant cashier before her college graduation; later she became a shift manager, and then worked as an associate director and director. Last year, she completed a corporate leadership program and was transferred to the corporate headquarters in the company’s human resources (HR) department. 
Currently the company operates 125 restaurants and employs about 5,000 employees. Employees work both full- and part-time. At each restaurant, shift supervisors manage teams of 12 to 15 employees. These employees are divided into three service areas: kitchen, cashiers, and dining. Kitchen employees are responsible for the preparation of food, plating dishes, and stocking the kitchen with food, beverages, and service materials. They do not interact with customers. Cashiers are responsible for taking and placing customer orders to kitchen staff, processing payments, and filling beverages. Dining area employees stock salsa bars with sauces, condiments, paper, and utensils, and clean the interior and exterior of the restaurant premises. Both cashiers and dining area employees are responsible for greeting and thanking customers and responding to customer inquiries. 
Delia’s Solution 
Delia is an active member of a local chapter of the Association for Talent Development (https://www.td.org ). She has met many colleagues who work in various restaurants, hotels, resorts, and cruise lines in South Florida and who encounter similar problems. More than once their discussions and presentations at the chapter meetings centered around successfully implemented mystery shopping at their companies. Delia decided to conduct her own research of the method by reading the professional literature, talking to colleagues, and consulting with two professional firms in the field of employee training and development and performance management. 
Mystery shopping is a well-known practice commonly used in service industries to improve customer service. A mystery shopper or secret shopper is a trained individual who acts as a typical customer or pretends to be a customer at a store, hotel, or restaurant. Following a carefully crafted scenario, the mystery shopper uses the company services (e.g., places orders, makes purchases, tries on clothes, or asks clarifying questions) and evaluates service quality using certain criteria. These criteria are scales developed by specialists who use company service standards as targets or expected on the job behaviors, which should be known to company employees. Service standards could include anything that the company considers important to make their customers happy, for example, friendliness of employees, the use of certain phrases to greet and address the customers, meal temperature, cleanliness of toilets, quality of external lighting, and even the volume levels of sound (Calvert, 2005; Erstad, 1998; Wilson, 1998). Mystery shoppers could visit the company or make inquiries via phone, email, or any other media, depending on the company and the objective. Employees should know that this practice is being used in the company; however, they do not know when a mystery shopper visits and how often. Typically, several mystery shoppers visit the company on different occasions each month. They are trained to use scales, ask specific questions, and make and record observations of the desired behaviors. 
As a result, mystery shoppers assess both tangible and intangible aspects of customer experience that are hard to assess by any other method (Douglas, 2015). This practice helps to achieve several goals, including assessment of employee professional competencies, stress and conflict management skills, and adherence to the company service standards (Wilson, 1998). Mystery shopping helps to determine employee training and development needs and teamwork quality and coherence (Calvert, 2005). Also, the assessment is tied to performance management and used to make decisions about employee promotions/demotions, transfer, awards, and financial compensation. 
Traditionally, mystery shopping has been used in banks, restaurants, hotels and resorts, transportation companies, retail, and some governmental offices (Erstad, 1998; Wilson, 1998). Due to its many benefits, the method has become adapted to evaluate quality of, for example, library services (Calvert, 2005), public speaking events (Peterman & Young, 2015), and HIV and STI testing sites (Bauermeister et al., 2015). 
After a careful consideration of all pros and cons of the method, Salsa leadership decided to support Delia’s idea to implement mystery shopping at its restaurants to improve customer service. The company decided to outsource this function and hired a well-known consulting company to develop and implement this practice and evaluate the results. Working with the chain’s HR and other management, the consulting company developed nine standards that were incorporated into the new evaluation system. These included standards of customer communication, customer service, speed of service, employee appearance, communication among employees, payment processing, food quality, cleanliness of the dining area, and positive atmosphere. 
These standards outlined expectations to employee behavior and attitudes. Each standard had a set of requirements to follow as a script. According to the standard of customer communication, for example, cashiers were expected to warn the customer if the dish was hot, recommend daily specials, offer a drink, and greet and address the customer in a uniform way written in the standard. According to the speed of service standard, cashiers were expected to serve each customer in 2.5 minutes. During payment processing, cashiers were expected to provide one receipt by handing it to the customer; all ordered items had to be included on this one receipt. Similar detailed expectations were developed for kitchen and dining areas employees. Each restaurant director was responsible for informing employees about the new practice and, hence, new method of performance appraisal. 
Unexpected Outcomes 
The first 6 months of the use of mystery shoppers showed some increase in the quality of customer service. However, to Delia’s surprise, this new practice also brought unexpected negative outcomes. 
First, restaurant employees began to express mistrust of the restaurant management and corporate leadership. They felt that the company had stopped trusting and caring about its people and had begun instead to trust the mystery shoppers who were complete strangers to the company. Employees also thought that the company had introduced mystery shopping in order to spy on its employees, document every mistake, and enhance disciplinary actions. As one cashier put it, “I can’t relax even for a second now. I do not know what customer is secretly looking at me and judging every word that I say. It is intimidating and I am not happy. I’ve worked for Salsa for 5 years and I don’t think I deserve being policed by the corporate.” 
Second, restaurant directors began to report decreased employee morale. The use of mystery shopping developed negative feelings, from dislike to hostility, among employees in three service areas (i.e., kitchen, cashiers, and dining). For many years, these had been evaluated individually against specific criteria pertinent to the specific service area. Now they were being evaluated as one big team of 12 to15 people, and many felt this was unfair. For example, kitchen employees did not think it made sense to be evaluated with dining area employees. As one kitchen employee explained, “These mystery shoppers say our salsa bar is a mess. But I am not responsible for the salsa bar! I don’t even go into the dining area. My responsibility is to be here, in the kitchen, and cook good food. And now my pay raise is in question!”
Finally, as employee frustration over mystery shopping grew, employees were also upset that their complaints went unnoticed. They could discuss their feelings with each other and their restaurant directors, but they thought it was not enough. Restaurant directors did not know how to respond to the employee concerns because they were not responsible for any aspect of the mystery shopping practice. Employees wanted to have a formal mechanism where they could express their thoughts and feelings about the practice, provide suggestions, and appeal the results of the appraisal. 
Delia is upset and frustrated. The method that seemed to be so promising has brought mixed results. She fears losing restaurant employees and needs to find solutions to these problems.
Questions:

Describe the situation at Salsa by making a link between a corporate strategy, the HR strategy, and employee response.
Find and read literature about mystery shopping.

◦ a. Discuss the main advantages and disadvantages of this method.
◦ b. Find and critique examples of scales used by mystery shoppers. 
◦ c. Explain the reasons for using internal and external mystery shoppers. 
◦ d. Summarize how mystery shoppers are recruited and trained. 
◦ e. Identify the main steps in developing a mystery shopper program.
 

Explain the employee response to mystery shopping as a new performance appraisal method. Find relevant literature to support your explanation.
Using your knowledge and terminology of human resource management and/or organizational behavior (HRM/OB), examine each negative outcome. Explain likely causes of the outcomes and suggest a set of possible practical solutions to each problem. Use relevant literature to support your ideas. Prepare a presentation to help Delia understand the situation and possible practical solutions.
Many companies could encounter similar problems when introducing mystery shopping as a new performance appraisal system. Explore how to best introduce this method to minimize possible negative outcomes. Create a roadmap for company management and HR to use when introducing and implementing this method.

 
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