Perfect Pizzeria in Southville, in deep southern Illinois, is the second-largest franchise of the chain in the United States. The headquarters is located in Phoenix, Arizona. Although the business is prospering, employee and managerial problems exist. Each operation has one manager, an assistant manager, and from two to five night managers.

The managers of each pizzeria work under an area supervisor. There are no systematic criteria for being a manager or becoming a manager trainee. The franchise has no formalized training period for the manager. No college education is required. The managers for whom the case observer worked during a four-year period were relatively young (ages twenty-four to twenty-seven), and only one had completed college.

They came from the ranks of night managers or assistant managers, or both. The night managers were chosen for their ability to perform the duties of the regular employees. The assistant managers worked a two-hour shift during the luncheon period five days a week to gain knowledge about bookkeeping and management. Those becoming managers remained at that level unless they expressed interest in investing in the business. The employees were mostly college students, with a few high school students performing the less-challenging jobs. Since Perfect Pizzeria was located in an area with few job opportunities, it had a relatively easy task of filling its employee quotas.

All the employees, with the exception of the manager, were employed part time and were paid the minimum wage. The Perfect Pizzeria system is devised so that food and beverage costs and profits are computed according to a percentage. If the percentage of food unsold or damaged in any way is very low, the manager gets a bonus.

If the percentage is high, the manager does not receive a bonus; rather, he or she receives only his or her normal salary. There are many ways in which the percentage can fluctuate. Since the manager cannot be in the store twenty-four hours a day, some employees make up for their smaller paychecks by helping themselves to the food. When a friend comes in to order a pizza, extra ingredients are put on the friend's pizza. Occasional nibbles by eighteen to twenty employees throughout the day at the meal table also raise the percentage figure. An occasional bucket of sauce may be spilled or a pizza accidentally burned.

In the event of an employee mistake, the expense is supposed to come from the individual. Because of peer pressure, the night manager seldom writes up a bill for the erring employee. Instead, the establishment takes the loss and the error goes unnoticed until the end of the month when the inventory is taken. That's when the manager finds out that the percentage is high and that there will be no bonus. In the present instance, the manager took retaliatory measures. Previously, each employee was entitled to a free pizza, salad, and all the soft drinks he or she could drink for every six hours of work. The manager raised this figure from six to twelve hours of work.

However, the employees had received these six-hour benefits for a long time. Therefore, they simply took advantage of the situation whenever the manager or the assistant was not in the building. Although the night manager theoretically had complete control of the operation in the evenings, he did not command the respect that the manager or assistant manager did. This was because he received the same pay as the regular employees, he could not reprimand other employees, and he was basically the same age or sometimes even younger than the other employees.

Thus, apathy grew within the pizzeria. There seemed to be a further separation between the manager and his workers, who started out as a closely knit group. The manager made no attempt to alleviate the problem because he felt it would iron itself out. Either the employees that were dissatisfied would quit or they would be content to put up with the new regulations.

As it turned out, a rash of employee dismissals occurred. The manager had no problem filling the vacancies with new workers, but the loss of key personnel was costly to the business. With the large turnover, the manager found that he had to spend more time in the building, supervising and sometimes taking the place of inexperienced workers. This was in direct violation of the franchise regulation, which stated that a manager would act as a supervisor and at no time take part in the actual food preparation. Employees were not placed under strict supervision with the manager working alongside them.

The operation no longer worked smoothly because of differences between the remaining experienced workers and the manager concerning the way in which a particular function should be performed. After a two-month period, the manager was again free to go back to his office and leave his subordinates in charge of the entire operation. During this two-month period, the percentage had returned to the previous low level, and the manager received a bonus each month. The manager felt that his problems had been resolved and that conditions would remain the same, since the new personnel had been properly trained.

It didn't take long for the new employees to become influenced by the other employees. Immediately after the manager returned to his supervisory role, the percentage began to rise. This time the manager took a bolder step. He cut out any benefits that the employees had-no free pizzas, salads, or drinks. With the job market at an even lower ebb than usual, most employees were forced to stay. The appointment of a new area supervisor made it impossible for the manager to "work behind the counter," since the supervisor was centrally located in Southville.

The manager tried still another approach to alleviate the rising percentage problem and maintain his bonus. He placed a notice on the bulletin board stating that if the percentage remained at a high level, a lie detector test would be given to all employees.

All those found guilty of taking or purposefully wasting food or drinks would be immediately terminated. This did not have the desired effect on the employees because they knew if they were all subjected to the test, all would be found guilty and the manager would have to dismiss all of them.

This would leave him in a worse situation than ever. Even before the following month's percentage was calculated, the manager knew it would be high. He had evidently received information from one of the night managers about the employees' feelings about the notice.

What he did not expect was that the percentage would reach an all-time high. That is the state of affairs at the present time.

Use one of the motivational theories discussed in this chapter to analyze and explain the worker's behavior and responses to escalating levels of management intervention.