Maryanne, a divisional manager for a major restaurant chain
had heard rumors about one of her unit managers, Paul. Paul
is her best manager, by any performance measure. His store
has the highest sales volume and growth, positive customer
feedback, excellent cost control, and consistently does well
on inspections. In fact, Paul consistently is rated higher than
the other restaurant managers of the chain's restaurants.
Because of this, Paul is often mentioned as a candidate for
promotion.
Maryanne was concerned, however, about reports that Paul
was taking in money from customers without ringing the
sales into the cash register. As a result, she sent some friends
to the restaurant at a number of times, and a few of them
reported back that the manager took their money, but,
indeed, did not enter the payment into the register.
In the meantime, Maryanne has also discovered that Paul
did not seem to be pocketing the money himself but was
using it as unrecorded payments to his crew as performance
bonuses, overtime incentives, and off-hours cleaning wages.
Though this was clearly in violation of the company's
procedures, he was not actually taking the money out of the
store for personal gain but was using it to achieve the high
performance which had become his trademark On the other
hand, because the funds are not accounted for as income, the
extra "wages" to Paul's employees have no payroll taxes
taken out. This means the company is at risk for a tax
liability action by the government. Should Maryanne take
action against Paul?
Questions:
1. Write a case summary.
2. What are the key points that should be emphasized?
3. What measures should be taken?
4. Should Maryanne take action against Paul? Explain?