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Based on photo by hotblack from

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Work on Assessments

Today you have a chance to work on your assessments in class and get my feedback on the work.

Assessment 1 – Research Assessment

Assessment 2 – Cert IV PGA – Operational Plan

Presentation by Manager Sangeeta Alex

Operational Plan 2013 – First in-class Presentation by Kangan Mangager


Based on photo by hotblack from
Based on photo by hotblack from

Link to all Classes     Class 1     Class 2     Class 3     Class 4     Class 5


  • Hand in Assessment 1 by 11am
  • Assessment 2 Handout

Complete and Hand in Assessment 1

Your first assessment is due today and I will allow you to double check all the info rmation prior to handing it in. Check your answers with your team member. Make sure that all your details are listed (name and student ID). Upload the assessment on MyKangan.

Assessment 2

Create an operational plan for yourself. Pick a medium term goal for your career or education and list all the things that you need to plan for by answering the questions.

This can be done individually or in teams of 2.
Upload the assessment on MyKangan.

Due Date: 16/7/13

Assessment 2 – Cert IV PGA – Operational Plan

Below is an example of an approach to Assessment 2: Let’s say my overall goal is to learn Adobe Dreamweaver by 30 January 2014.

So, my clear objective would be to able to design a website in Dreamweaver with an interactive menu, a minimum of three linked pages (home, about us, portfolio) and images that upload. I will be able to include HTML, CSS, JavaScript or JQuery and XML elements.

Where am I now might be: my current Dreamweaver skills are very basic. I need to learn how to develop a web page to suit a specific layout. I need to learn how to add and link images, and add meta data to images. I need to be able to get a better overall understanding of the interface, at the moment I feel to intimidated by it.

The resources that I need are: a computer with Adobe Dreamweaver CS 6, the Internet, and an online tutorial site, eg Adobe TV, Digital Arts Online or Noupe.

I hope this gives you a bit of an idea, what is expected. Make it as realistic as you want.

Based on photo by hotblack from
Based on photo by hotblack from

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  • Today we will talk about what an organisation or business will look at when recruiting and inducting employees
  • We will have a guest speaker: Rao Diwakar. Assistant Manager of ICT at Kangan Institute
  • Work on Assessment 1
  • Guest Speaker on Thursday: Michael Ball, Manager of SSR at Kangan Institute

Recruiting and Inducting Employees

Finding suitable staff for a business is central for the success and often the survival of a business. The task of having to find the right person falls to a manager responsible for the operational side of a business. At an institute like Kangan it is the role of a department manager to find suitable candidates. Some organisations may have a more centralised approach and get their HR (Human Resources) department to conduct the recruitment.

An organisation needs to first establish what position is available. This will depend on their needs.

Their needs will be written down in form of a Position Description.  A position description will make the task of finding the right person for the job more streamlined. From the position description the recruiter will develop a set of Key Selection Criteria. Key selection criteria are the skills, attributes, knowledge and qualifications essential for satisfying the requirements of the job.

Almost every job vacancy will have a list of Key Selection Criteria attached to it. Applicants who fail to address those in their application will most likely fail at getting the job.

Finding the Right Candidate for a Job... - Photo AdamRiley from
Finding the Right Candidate for a Job… – Photo AdamRiley from

In Class Task

What job or career are you interested in? Do a job search on SEEKCareerOne, GumTree or MyCareer for a job advertisement. Try to find the Key Selection Criteria for that position.

You might to search for a moment and you are likely to only find an excerpt of the criteria, generally the full list is available on request. Bookmark the ad.

Class Discussion

Share the Key Selection Criteria of your job advert with the class. Pick one and describe in your words what it means. Do you think that you would suit that criterion?

Guest Speaker

Rao Diwakar makes operational plans and decisions as part of his work . He is so kind to share some of his knowledge on operational planning, creation of KPIs, recruiting and inducting employees and performance monitoring and management strategies. It is a great opportunity to ask him questions. So, try to get as much information of him and use the time well.

Assessment 1

The rest of class time will be used for you to work on assessment 1. It is due on 4/6. You do not need to make the answers up, you can ask experts and get them to supply you with the answers – it is a research assessment.

Assessment 1

This Thursday

We will have a third and final guest speaker on Thursday (during our EDSS class) to give us an insight into this topic. The guest speaker is Michael Ball, the manager of SSR (Student Support and Recreation). SSR has a different purpose to ICT and it will be very interesting to hear his focus on operational planning.

The three guest speakers should make the completion of the first Assessment a walk in the park.

Based on photo by hotblack from
Based on photo by hotblack from

Link to all Classes     Class 1     Class 2     Class 3


  • We will commence the class by looking at the 5 contingency plan examples out of your own life (task from last class) and comparing them in class.
  • Next you will receive Assessment Task 1.
  • We will have a guest speaker: Sangeeta Alex. Manager of Customer Relations and Student Services

Personal Contingency Plans

Share your five plans with the other students. If in class share all your 5 examples, if online please submit your example as a comment.

Undo is not often an option in the real world... F.Viola
Undo is not often an option in the real world… F.Viola

Assessment 1

This assessment is due in 2 weeks. You do not need to make the answers up, you can ask experts and get them to supply you with the answers – it is a research assessment.

Assessment 1

Guest Speaker

Sangeeta Alex is a Manager at Kangan Institute. She is so kind to share some of her knowledge on how to implement operational plans and how to create KPIs. It is a great opportunity to ask her questions. So, try to get as much information of her and use the time well.

Based on photo by hotblack from
Based on photo by hotblack from

Link to all Classes     Class 1     Class 2     Class 4


In the previous 2 weeks we looked at the terms:

  • Strategic Planning
  • Operational Planning
  • VMB board
  • KPI – Key Performance Indicator

All these terms need to be seen in relation to applying an operational plan.

Today’s class is about contingency planning.

Contingency Planning

Contingency planning is an important part of operational planning. A contingency plan is basically an alternative plan or a ‘Plan B’, when events do not turn out as planned.

You could refer to it as Planning for Disaster by anticipating potential problems, or events that could have a negative impact if not dealt with (by using an alternative plan).

‘Events not turning out as planned’ could mean either an emergency or simply a change of events (leading to a change of plans). Life is really a lot about change, so life is in a sense about contingency plans.

Here are some examples:

  • (Events as planned) You were going to make Sticky Date Pudding for desert at a dinner party > (Emergency or problem) You realise too late that you have forgotten to buy an important ingredient, eg cream > (New or Contingency Plan) Your contingency plan may be to use an alternative or to quickly go to the 7/11 and buy cream at a higher price
  • (Events as planned) You are about to start a group assignment with 2 other students (Emergency or problem)  One students gets very sick and will not be able to meet you in person > (New or Contingency Plan) You decide to collaborate online, using Google or other online conference and sharing tools or You decide to drop that student from the group and approach someone else
  • (Events as planned) Rudi B has 3 children and and his wife is a full-time mother (Emergency or problem)  Rudi loses his job and monthly income. > (New or Contingency Plan) His Income Protection Insurance provides him with an ongoing income for 18 months. He has time to look for a new job.
  • (Events as planned) We are in class at Kangan. It is a beautiful day (Yong is sleeping, Lucine is not on Facebook and Adam is glad that Toni is back in class).  > (Emergency or problem)  The fire alarm rings! (New or Contingency Plan) We follow the Contingency Plan which is the Emergency Plan. We leave the class room, the teacher locks it and we assemble in the car park.
Photo by clarita on morgueFile
Photo by clarita on morgueFile

You see that all these examples are simple and easy to deal with. Each requires a different level of foresight and each emergency or change of events may be dealt with differently.

Contingency Plans are necessary on many levels:

  • Supplies of ingredients for a restaurant – it is worse to run out of an ingredient when someone pays for the food!
  • Anti Terror Laws and Measures are a form of contingency plan.
  • Increase of petrol prices will require transport businesses and suppliers to react (this may be an increase in their fees)
  • A cheaper competitor that undercuts the prices of an established brand and wins customers over will have an impact on the prices of the established brand.

Contingency Task

Think of 5 scenarios for something going wrong or not to plan in your life and write down:

  • the event as planned (eg driving to TAFE)
  • the change of events or emergency (eg the car breaks down)
  • the contingency plan (eg SMS Federico and come by Public Transport)

Keep it simple and have ready for next class. 😉

Here are some simple examples and explanations online:

Example of Contingency Planning for a student

Contingency Plan for Music Video

Based on photo by hotblack from
Based on photo by hotblack from

Link to all Classes     Link to Class 1     Class 3     Class 4

We will start today’s class by thinking about the terminology introduced in class 1 –

on a sheet of paper write your own understanding  of:

  1. Strategic Planning
  2. Operational Planning
  3. VMB board

KPI – Key Performance Indicator

Key Performance Indicators (short: KPIs) are an extremely important measure in successful businesses. We will look at the definition of KPIs, how to create a KPI and look at examples. You will then need to create an example KPI.

Please open the presentation below and follow it in class.

KPI – Presentation

In 6 teams we will look at examples of KPIs used in hospitality and report back to the class.

Examples of KPIs used in restaurants, cafes and similar businesses

Below is a text with examples of KPIs used in restaurants, cafes and similar businesses. Read and write one from each category that you can relate to on a sheet of paper. We will use it in a group discussion.
Source:  (Sourced in August 2012)

Key Performance Indicators for Restaurants, Cafes, Catering, Clubs and Hotels

Remove the guesswork from managing your business by checking the numbers that tell you what’s really happening.
There’s a business saying: ‘if you can’t measure it, you can’t manage it!’ Real, responsive management needs reliable and truthful figures on which decisions can be based. If there are problems, you can take corrective action quickly. If you are having success, you’ll know to do more of what you’re doing! Good figures also give you a wider understanding of your success – sometimes if it’s a quiet month (when your suppliers are telling you that ‘everyone’s quiet!’) you’ll see that some of your KPIs are actually improving (eg sales per head). Well done – it is not all doom and gloom!
Watch several figures from each of the 6 following sections.

1. Staff and Employment KPI’s

Wage Cost % – wage costs as a percentage of sales.
Total Labour Cost % – not just wages but also the other work cover insurance, retirement and superannuation charges and other taxes that apply on your payroll.
Total Labour Hours – how many hours worked in each section. This is useful to compare against sales to measure productivity.
Function Labour charge-out. Caterers usually charge-out service staff at a markup on the cost of the wages paid. Are you achieving a consistent mark-up?
Sick days taken – sometimes a measure of morale and the management skills of your management team.
Labour turnover (number of new staff in any one week or month) Everyone says high staff turnover is ‘part of the territory’ in hospitality. It doesn’t need to be like that, but one way to measure how good (or bad) you are at controlling this is to measure labour turnover. Count the number of positions you have (A), then count the number of people who you have employed during a certain period (B). Divide B by A and you will get a labour turnover figure, sometimes expressed as a percentage. For example if you have 10 staff positions and you have employed 38 people in the last year, your Staff Turnover is 38/10 or 380%!!
Average length of employment – another way to look at your success in keeping staff. Add up the total number of weeks all your people have worked for you and divide this by the total number of staff.
Average hourly pay – divide the total payroll by the number of hours worked by all staff.

Photo by frenchbyte on morgueFile
Photo by frenchbyte on morgueFile – He does not look too happy, maybe he is studying this class?

2. Kitchen Management

Food Cost % can be measured quickly by adding up food purchases for the week and measuring them against your food sales. This is based on the assumption that you are not holding very much stock (as it’s perishable, you need to sell it or throw it out!). You may also do a stock-take regularly to get a more accurate food cost percentage, although the burden of kitchen stocktaking often means it is not done very often.
Total Food Costs – how much was your total food bill? Sometimes a useful figure to show staff who think you are made of money!
Food Costs per head. It can be useful to see every week how much it costs to feed an average customer. If your menu and sales style is consistent, this should also remain much the same. If it starts to go up, you will have to find out what’s happening!
Kitchen Labour % – it’s only fair to measure kitchen productivity by comparing kitchen labour against food sales, not total sales (alcohol and beverage sales may be influenced by other factors).
Kitchen Labour hours – how many hours worked in this section? Compare against sales to measure productivity.
Stock Value – how much food stock are you holding? It should be less than a week’s use, but can slip out if you are storing frozen seafood or Cryovac meat (a packaging method that is supposed to prolong the life of meet).
Best (and worst) selling items – check the weekly sales from your POS or dockets. Did you know what the best sellers were? Map these on the Menu Profitability Analyser.
Kitchen linen costs – the cost of uniforms, aprons and tea-towels can be a shock! How many tea-towels are you using each day? (Have you thought about laundering them yourself?)

3. Front of House and Restaurant Management

Total Sales Per Head – your total sales divided by the number of customers. How does it compare to last week and last month? This may vary between different times of the day .
Number of customers – simple! A good measure of popularity.
Food, Dessert, Beverage Sales per head. These are divided into key areas of choice – main course and starters, desserts, non-alcohol beverages, alcohol and perhaps also side orders (eg breads and salads) and other product sales. It’s the perfect indicator of two things – how much your menu appeals to your customers (do you have all the choices they want, eg the right dessert selection?), and how well your staff are selling. This KPI can be a good basis for a bonus system.
Seating Efficiency – how well your tables are being turned over while still offering high quality customer service. Usually many small things combine to have a large impact – cooking time, seating, service and clearing. The size of tables relative to the average group size will also make a difference.
Basket Analysis – eg how many items do lunch customers buy? What else do morning coffee drinkers order, or red-wine drinkers (mineral water if the servers are awake)? A recent analysis with a client showed that typical diners ordered only 2 items (most ordered nothing after the main course) and many of the lunch customers did not order a beverage. Grab a pile of dockets from a typical day, and look for ordering patterns.
Linen costs – uniforms, aprons etc.
Front of House Labour % – how many hours worked in this section? Compare against sales to measure productivity.
FOH Labour hours – how many hours worked in this section? Compare against sales to measure productivity
Customer satisfaction. This is measured in different ways. Feedback forms, complaints and other methods that are hard to quantify sometimes but worth making an attempt.
Strike Rate – if 500 people came to your club last night and only 100 ate at the bistro, your ‘strike rate’ would be 1 in 5, or 20%. Good enough? Compare with similar businesses and different times.
RevPASH – Revenue per Available Seat Hour. The same idea hotels use to measure Revenue per Available Room. For RevPASH take the total number of ‘seat hours’ and divide total revenue for a period by this number.

4. Bar and Cellar Management

Sales per head. Useful to have them separately for alcohol beverages and non-alcohol (juices, mineral waters, soft-drinks and coffee etc). It’s the perfect indicator of two things – how much your beverage and wine appeals to your customers and how well your staff is selling. This KPI can be a good basis for a sales bonus system.
Gross Profit on sales – the difference between what you sold and what it cost you. The sales mix can influence this heavily. If you are selling two bottles for the same price, but one costs you $5 to buy and one costs you $7 to buy, you should try to maximise the sales of the one with the highest dollar profit.
Average Profit % on Sales – useful to see if your sales are holding steady, although ultimately the actual Gross Profit (real money) will matter the most.
Stock Value – how much cash is locked up in the value of your cellar? Tens and even hundreds of thousands of dollars can be tied up in cellar stock and you don’t realise it! It’s worth checking with your suppliers and seeing how much you can order ‘just in time’. This is where retail business models are useful to compare, because unlike food stock, these supplies are not perishable, which can lead to a temptation to hoard. Also, the romance of wine lists and ‘special deals’ can lead to stock blow-outs! Weekly stocktakes are essential for proper management.
Stock turnover – how fast is your cellar stock selling? If you are carrying wine stock worth $50,000 and the value (not sales) of what you sell each week is only $10,000, it’s taking 5 weeks to turn over your stock. That’s too long! An accurate figure here will be based on regular stocktakes and accurate sales information.
Carrying cost of stock – what is the cost of financing this $50,000 of stock? Take the current interest rate for borrowing money, apply it to your stock value, and divide by 52 to get a weekly figure. If stock is valued at $50,000 and interest rate is 8%, annual cost of financing the stock is $4000 or $77 per week.
Sales / stocktake discrepancies. Alcohol means security problems, and keeping an eye on ‘shrinkage’, staff drinks and stealing is a constant problem. As an essential KPI, measure the difference between what you used (from comparing two stocktakes) and what your POS system says you sold. You often need to find our why they aren’t the same!

Photo by ariadna on morgueFile
Photo by ariadna on morgueFile

5. Sales and Marketing plus Function Management

Number of customers – simple! A good measure of popularity.
Visits by your top 100 or 200 customers – they provide a huge proportion of your sales! Track their frequency and spending – these people are gold!
Sales per Head – across all areas
Marketing and advertising costs – the total value of what you spend, always trying to measure it against the response you get. A difficult one to measure, but worth investigating.
Response rates – how many people responded to different campaigns and what effect did this have on profit?
Press Mentions – keeping your eyes open for favourable mentions.
Bookings – in the current week and month and coming up. Also in peak times, eg Christmas.
Function Inquiries – number of inquiries about large bookings and functions, especially if you have undertaken a campaign to promote them.
Sales inquiry conversion rate – the number of inquiries that turn into actual sales. If 50 people asked for information about your function packages and this resulted in 10 firm bookings, this would be a conversion rate of 1/5 or 20%. You would want to look at why so few people were ‘converted’ – was it the quality of the promotional material, skill of the sales staff, pricing or make-up of your function menus and facilities?

6. Management of Finance and Administration

Cash position at bank – how much do you have available after reconciling your cheque book?
Stocktake discrepancies – a measure of the efficiency of each department, but also of the administrative systems in place. They need to be simple and easy for line staff to fill in, and the results should be made known quickly if they are to have an impact.
Total accounts due – how much do you owe?
Total accounts payable – not usually a problem in restaurants and pubs, but needs careful management if you have accounts, eg large restaurants.
Return on Investment – the profit your business makes can be measured as a percentage return on the amount you have invested in it (see the Balance Sheet). Is it sufficient?
Taxes owed – most of these taxes are not paid at the time they are collected. Hence the need to know how much is owed at any one time so it is not ‘spent’.
Sales & costs – actual figures compared to what you budgeted for the period. You will want to see real dollar figures and percentages.
Administration labour costs. This is often begrudged in hospitality businesses and seen as ‘not productive’. But strong and skilful administrative support will be essential to manage the KPIs listed above!
Computer and technology efficiency – how much down-time for your computer system? How accurate is the POS system? How many of your staff know how to use the equipment they use each day, eg telephones – can everyone transfer a call properly?

Class Task

Please complete the comprehension task below by answering the questions!

Class 02 – Comprehension – Task1

Based on photo by hotblack from
Based on photo by hotblack from

Link to all Classes     Class 2     Class 3     Class 4

Welcome to your first class of ‘Implement an Operational Plan’.

Please open the presentation below and follow it in class.

Class 1 – Cert IV in PGA – Overview

Comparing Operational and Strategic Planning

In-class discussion on what the words strategic and operational imply:

Strategic: theory, plan, ideas

Operational: practical, the actual doing of it

Looking at strategic and operational planning in the context of:

  • Chess:  the strategy relates to the moves ahead, the player is thinking about a number of combinations. The player will try to determine and anticipate the opponent’s moves, while thinking through a number of moves that would give the player an advantage.
  • Military: the general may think about a strategy of attack, while on a lower level of the hierarchy, the Captain may think about how to implement the orders and how to make it happen.
    This may include thw day to day running of an army, the resource management, the movement of the troops.

Strategic and Operational Planning for an Institute

In teams Use Kangan Institute as an example and list aspects that relate to planning on a strategic level and planning related to the operational level of a business.

Discuss your findings.

View the VMB (Visual Management Board) used by ICT

Students will view the VMB used by ICT and understand how ICT manages the strategic vision of the institute and translates it to an operational level.

If you missed this class you will need to check with your colleagues and teacher on what the VMB was about.