Keeping employees happy pays off

Nation's Restaurant News,  Dec 22, 2003  by Dina Berta

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In the 1950s, when Richard W. Kubach was planning the new Melrose Diner in south Philadelphia, he built a model out of balsawood and Styrofoam to about the scale of his son's 8-inch-high toy men. He would move the toys around in the model to envision what it would be like, not for customers, but for employees. When the diner was built, he installed air conditioning, not just in the dinning area but also in the kitchen. The son grew up working in the diner and always heard his father preach about the importance of treating an employee right.

That message was not lost on Richard Kubach Jr., who took over the Melrose Diner in 1973. A former board member of the National Restaurant Association, the younger Kubach was named Restaurateur of the Year in 1994 by the Pennsylvania Restaurant Association. Last month, however, Melrose won an award that would have made his father proud: the Psychologically Healthy Workplace Award from the American Psychological Association. The diner was one of 15 businesses nationwide, and the only restaurant, to be recognized as one of the best places for people to work.

Why did your father say it was important to put employees first?

He did not want customers to come in looking for him to resolve problems. For customers to be happy with their experience, he thought it was critical for employees to be happy. So we try to do everything we can as a business to make sure they have a good job, good working conditions and a comfortable environment.

The diner offers several perks to employees, such as paying tolls for those who commute, sharing the cost of their work shoes, giving them a pension plan, paid vacations and benefits. Yet the average check is between $5 and $8. Still, the restaurant averages about $4 million in sales. How can you afford some of those benefits, especially health care?

It's tight; it's not easy. It takes volume. We have to watch our costs very closely. It's never been easy. Since I was a teenager we've had health care for employees.

Your father sounds as if he were ahead of his time. Do you think operators today are as concerned with their employees?

I've seen a lot of change over the years. More businesses are trying to give more reasonable hours to prevent burnout and to provide careers.

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