Inventory Efficiency Incentive Plan

TL,DR: Stay on budget, get a bonus!

Why are we doing this incentive program?

We have a tendency to overspend on Ingredients and Supplies, affecting our profitability. This program incentivizes the company to be efficient in usage, reduce waste, and order just enough inventory to meet demand.

 

Objective

• Manage inventory costs while upholding product quality
• Purchases of ingredients and supplies should be no more than one-third of monthly sales (only food sales, excluding event tickets and other non-food sales)

 

Bonus Structure

If purchases (ingredients and supplies) do not exceed one-third of the monthly sales:

• On-Budget Bonus: P2,500 if exactly on budget
• Under-budget Bonus: 100% of the savings, capped at P5,000

 

Example Scenarios

• October: Sales P300k, Target Purchases P100k, Actual P105k - No Bonus.
• November: Sales P360k, Target Purchases P120k, Actual P115k - Bonus of P5,000.
• December: Sales P420k, Target Purchases P140k, Actual P133k - Bonus of P5,000.
• January: Sales P300k, Target Purchases P100k, Actual P100k - Bonus of P2,500.

 

How is the Bonus Shared?

• 50% of bonus is divided across department heads (cafe manager, kitchen head, bar head)
• 50% of bonus is divided across full-time, regular staff (excluding utility and security staff)

 

When is the Bonus paid? 

Bonuses are paid together with payroll every 15th of the succeeding month. 

 

Note

The incentive program will end immediately if there's evidence of abuse, such as purchasing low-quality ingredients or hoarding.

Last edited: October 2024