Putting Employees First

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Panda Express puts a premium on employee satisfaction. The Rose-mead, Calif.-based chain of quick-serve Chinese restaurants has made it a practice since its founding in 1983 to put its employees first. And in doing so, the 1,095-store chain has managed to grow and thrive during a time when the restaurant industry as a whole is feeling the pain of a struggling economy.

Panda Express opened some 160 locations in 2007 and another 160 are slated to open this year. The chain hit the $1 billion sales mark last year and is expected to climb to $1.26 billion by yearend 2008. In 2007, the company marked its 12th straight year of same-store-sales growth—and chainwide, sales increased 19% in 2007 and, in 2008, the company is expecting that number to rise another 20%.

Why the continuing upturn during a nationwide downturn? According to Linda Brandt, chief people officer for Panda Restaurant Group, Panda’s focus on people—and not on number-crunching—is a dominating factor in the chain’s success.

“The way we think about it is that we are in the people business,” said Brandt. “Our mission statement best sums it up: Deliver exceptional Asian dining experiences by building an organization where people are inspired to better their lives.”

Panda’s people-first mission is felt throughout the ranks.

“A pyramid graphic consistently drives home our message,” explained Brandt. “The pyramid is displayed at every meeting, reminding everyone what our focus is.” The pyramid puts people at its base— the biggest part—topped by guests and then by financials. “Our idea is that when we do the right things for people, we’re going to in turn serve the guests properly, and the financial results will flow from that.”

In addition to the routinely presented pyramid, Panda also incorporates a variety of programs and policies designed to underscore the people-oriented culture. One of the most noteworthy is the Panda Leadership Forum, which is designed for high-potential area coaches (Panda’s designation for multi-unit supervisors). After receiving a nomination by a supervisor, Brandt said, the selected employee will travel to the company’s headquarters four times a year to participate in various personal self-awareness and skill-development activities and events. As well, the company has a hiring policy that allows for maximum employee growth. “We have a 70% internal promotion rate from our store level up to general manager,” she added. “Above store level, promotions are 100% internal.” To date, no senior executive has come from outside the Panda ranks.

The emphasis on employees starts at the very top. Company founder Andrew Cherng personally interviews every headquarters employee, whether part-time or full-time. Today, there are 400 corporate employees, working in a culture Brandt describes as nurturing, instructional and focused on giving back, whether through the nonprofit Panda Cares program or through internally driven training and development events.

“This is about bettering lives,” said Brandt. “It isn’t just about Panda.”

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