Making the grade

Making the grade
Tags: Food & Beverage, Food Safety, Operations Management
November 23, 2010

I remember it like it was yesterday… Derek, my best friend in 7th grade, ducked down in the back seat of the school bus and said “Cover me!” I turned around to at least act like I was protecting him from any back of the bus intruders. Then I peeked over my left shoulder to see what I was protecting for him. There was Derek, with a black pen and eraser in hand, attempting to change his grade in Math and English so his parents wouldn’t ground him like they did the previous semester.

Oh the stupid things we all did as kids, especially when it had to do with our grades. We’d go to great lengths to keep our grades secret if at all possible.

But today in Los Angeles County, parts of North and South Carolina, and most recently in New York City grades for restaurants are far from secret. In these parts of the country, a letter grade given by the health inspector must be posted prominently where it can easily be seen by people passing by. These letter grades range from A to C and have created a significant amount of buzz within our industry.

As you would expect, most restaurants think it is unfair while most consumers are glad for the extra visibility into their favorite eateries. So why the vast difference in opinion?

From the restaurant perspective, health inspections measure a restaurant at a specific point in time. Many of the violations issued during an inspection are fixed either during the visit or soon thereafter. Since health inspections typically occur only twice a year, a restaurant could be stuck with a C for 6-8 even though they fixed the violations quickly. It is important to note that in NYC’s regulations, if you receive a B or C, you do not have to post it for thirty days allowing for improvements to be made as well as a second inspection.

From a consumer perspective, grades provide a sense of how clean and safe a restaurant is. It shows more transparency and allows for consumers to make more informed decisions. So is it working?

A 2003 study conducted by Ginger Zhe Jin and Phillip Leslie entitled “The Effect of Information on Product Quality: Evidence from Restaurant Hygiene Grade Cards” provided some very interesting findings to the new regulations implemented in Los Angeles County:

The introduction of grade cards corresponded to a 20% decrease in the number of people admitted to hospitals with food-related illnesses
A restaurant receiving an A grade saw an average revenue increase of 5.7% relative to their revenue when there were no grade cards (C grades saw a decrease of 1%)

Overall, the study found that by providing more information to consumers, restaurants paid more attention to food safety overall.

So what do you think? Would you welcome letter grades knowing the increased accountability could be a good thing for you and your team ultimately having a positive impact on your revenue? Or would you fight it knowing there are some flaws in the letter grading system? I know one thing for sure… decreased hospitalizations and increased food safety awareness among kitchen staff is something I can support wholeheartedly.