Theoretical Labor

Copyright 2011
MICROS Systems, Inc
Columbia MD USA
All Rights Reserved
MD#0015-020

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Edition

Month

Year

1st

July

2007

November

2011

nd

Contents
Declarations

Overview

Theoretical Labor Metrics

Theoretical Labor Standard

Theoretical Labor Program

Theoretical Labor Allotment

10

Appendix

15

Theoretical Labor

Overview

CHAPTER 1

Overview
The mymicros.net Theoretical Labor (TL) feature identifies labor overages in near real-time,
by comparing actual labor vs. what it should be for the business volume that is generated.
This approach is an improvement over traditional theoretical labor models that typically use
forecasted labor, which based on forecasted sales. Removing the often-unpredictable sales
forecast as a factor greatly improves the accuracy and value of this calculation.
TL is measured against one of three actual labor types:
1. Job Code
2. Job Category, or
3. Labor Category.
The labor type is then used against one of four operational indicators to determine the
Theoretical Labor for the period. TL can then be compared to actual labor in terms of Labor
Hours and Labor Cost (dollars).

Theoretical Labor

Overview

Theoretical Labor Metrics

CHAPTER 2

Theoretical Labor Metrics

TL analysis may be implemented by establishing one or more TL Metrics. Each TL Metric
may have one or more TL Standards associated with it.
As an example: If the TL Metric is Server Labor, there may be different staffing standards
based on day part or time of day and day of week.

TL Metric

TL Standard

TL Description

Server Labor

M-F Lunch Shift

The standard used to determine server

staffing at lunch Monday - Friday

M-F Dinner Shift

The standard used to determine server

staffing at dinner Monday - Friday

Saturday & Sunday

The standard used to determine server

staffing on Saturday and Sunday

Each Metric may be displayed on the TL Charts and Theoretical Labor Analysis Report:
To setup a Theoretical Labor Metric:
1. Login as Sys Admin
2. Navigate to Admin | Warehouse | Theoretical Labor | Theoretical Labor Metrics

Chapter 2 Theoretical Labor Metrics

3. Select Add (or select an existing metric and click Edit) from the top menu bar

4. Enter/modify the name field

5. Save

Theoretical Labor

Labor Metrics

Chapter 3 Theoretical Labor Standard

CHAPTER 3

Theoretical Labor Standard

The Theoretical Labor Standard is often considered the "heart" of the application. It is here
where the actual configuration of TL takes place. This section will determine three areas of
TL:
1. Which labor type will be reported on
2. On what basis the labor type will be reported
3. How will the theoretical labor be determined (Values Tab)
Main Tab

Labor Metric (Required)

Indicates what Labor Metric this Standard belongs to.
Standard Description
Each TL Standard has a description field. This should be used to describe the standard and
helps standard selection when a Metric as more than one standard.

Theoretical Labor

Labor Standard

Chapter 3 Theoretical Labor Standard

Labor Revenue Center

The TL Standard may be used to determine staffing for a revenue center by revenue center
basis. This is particularly useful for larger properties or outlets. If this is not required, the
Labor Revenue Center Master and Labor Revenue Center POS Reference fields should be
empty. If this is to be used, choose either a Labor Revenue Center Master or enter a Labor
Revenue Center POS Reference number.
Labor Program
Labor Programs can be used to assign TL Standards to particular stores instead of the
organization as a whole. This indicates what Labor Program the TL Standard belongs to. If
none, this Standard will apply to all locations in the organization that do not have a Labor
Program assigned (See section 3, Administer theoretical labor programs, for more
information).
Labor Type (Required)
The TL Standard may be compared against one of three types of actual labor: Labor
Category, Job Code and Job Category. Once the Labor Type has been set, depending on the
selection, select a Labor Category Master, Job Category Master, Job Code Master or enter a
Labor Total POS Reference number (the object number associated with the labor category,
job code or job category).
Labor Rate
The TL engine will not only determine the theoretical hours but may also determine the
theoretical labor cost. This is enabled by assigning a Labor Rate. This is the theoretical cost
of labor per hour. It is used in charts and reports for comparison with the Actual Labor cost.
For example: the entry of 8.25 will assign a theoretical hourly labor cost of $8.25.
Basis Type (Required)
This determines the volume indicator upon which the labor standard is based. The choices
are:

Net Sales

Gross Sales without Discount Total

Number Guests

Number of Check (or transactions)

Number of Table Turns.

In each case, a revenue center may be selected so that the volume indicator will only reflect
the activity of a specific revenue center (and the labor standard will be based on that
activity). If the revenue center is to be used, selected either a Basis Revenue Center Master
or enter a Basis Revenue Center POS Reference number.
If either the basis type Net Sales or Gross Sales without Discount Total are selected, a major
group may also be selected. This allows a volume indicator to be refined to a major group
level, such as food or beverage sales. If a major group volume indicator is to be used, select
either a Basis Major Group Master or enter a Basis Major Group POS Reference number.

Theoretical Labor

Labor Standard

Chapter 3 Theoretical Labor Standard

Labor Standard Period

The period being covered by this Standard must be defined:

The start and end of the period. This is defined by 15 minute period.

The active days of the week.

The system will alert the sys admin if labor standards overlap.
Master vs. POS Reference - General Comments
In a number of places, the sys admin has a choice between selecting a master item or a POS
Reference number. This option is provided for convenience. However, if master alignment is
not being used, the POS Reference entry should be used. In all cases, only one of the two
fields should be entered.
Values Tab
The Values tab is used to declare the actual labor standards. When configuring, everything is
based per hour. Actual calculations are done every fixed period.

This can be done in one of two ways:

1. By Factor
When this is selected, a scale minimum and a scale factor may be applied. A factor is
a straight-line calculation using a fixed scale factor multiplied by each standard fixed
period increase in the volume of the basis type plus a minimum value.
The calculation is:

Labor Hours = (scaleMinimum + (scaleFactor/100)*(15MinVolume * 4))/4

scaleMinimum is the minimum number of labor hours required when the

Volume = 0

scaleFactor is the number of hours to add for each increase of 100 in

Volume.

Theoretical Labor

Labor Standard

Chapter 3 Theoretical Labor Standard

2. By Step
Step can be a non-linear, step-wise calculation where theoretical labor is based on
specific threshold values of the basis type. The Step Basis should contain the
hourly volume indicate, Theo Hours should contain the number of hours to apply
when the volume indicator does not exceed the Step Basis. For example the
following table shows how theoretical labor hours could be defined for specific
volumes of sales per hour:
Step Basis (sales/hr)

Theo Hours (labor/hr)

100

180

300

400

12

500

15

10000

20

If sales in a particular 15 minute period are $45, this is equivalent to $180/hour, thus
4 hours of labor should be used, or 1 hour within a 15 minute period.
All step tables should include a buffer with a capped labor metric as the last entry (in
the example, this is $10,000 and max of 20 staff). This prevents an overflow during
high activity trading or business periods.
The system will set theoretical labor to zero for a 15 minute period if the basis or
volume indicator for that period is a zero or has a negative value.
Note

All calculations are performed in 15 minute intervals.

All standards calculations convert the 15 minute volume indicator to the equivalent
of hour activity (by multiplying by 4). They then take the resultant labor hours and
divide those by 4 to arrive at the theoretical labor for that 15 minute period.
Up to 20 steps may be declared.

Theoretical Labor

Labor Standard

Chapter 4 Theoretical Labor Program

CHAPTER 4

Theoretical Labor Program

The Theoretical Labor Program allows creating individual Theoretical Labor Standard
for Location / Group of Locations. Labor Programs are not required to use Theoretical
Labor. It is a method to allow you to configure different standards, for the same Time
Periods, across your Organization.

To create a new Labor Program, go into Theo Labor Program Administration and select Add.
Define the name of the Labor Program and save.
Note

The External Ref is a free, definable field and can be used for
exports or reporting.

Specific locations can be assigned to a specific Labor Program. To assign a Labor Program
to a location:
1. Login as Sys Admin
2. Navigate to Admin | Portal | Organizational Structure | Locations
3. Select Add (or select an existing location and Edit) from the top menu bar

Theoretical Labor

Labor Program

Chapter 4 Theoretical Labor Program

4. In the Labor Program drop-down, specify a Labor Program; this Labor Program is
the same program that was set up in the Theoretical Labor section of the portal:

Within the TL Standard, you can assign the standard to a specific Labor Program. This
standard is available only for the specified Labor Program. If set to none, the Standard will
apply to all locations in the organization that do not have a Labor Program assigned.
How to setup a Theoretical Labor Standard:
1. Login as Sys Admin
2. Navigate to Admin | Warehouse | Theoretical Labor | Theoretical Labor Standard
3. Select Add (or select an existing TL Standard and click Edit) from the top menu bar
4. On the Main Tab, identify the Labor Metric, Labor Type, Basis Type, and the
Beginning and Ending Times
5. On the Values Tab, identify the Calculation Type using either Factors or Steps
6. Save

Theoretical Labor

Labor Program

Chapter 5 Theoretical Labor Allotment

10

CHAPTER 5

Theoretical Labor Allotment

Hours Calculation
Theoretical Labor Daily Allotment Hours is a calculated part of the allotted daily hours. It
serves as a subset of the standard theoretical labor fixed period total calculation. It is used to
provide daily preparation hours to a labor metric. The calculation is done at the end of each
day. The hours may be imported (e.g. fixed) or calculated (e.g. prep). This will be done
in a general way to support an unlimited number of allotments.
The key difference between the TL Allotment Standards and the TL Standards is that TL
Allotment Standards calculate for a day at a time where the TL Standards calculate for every
15 minute fixed period within the configured start and end time.
End-Of-Day Processes
At the end of each day, every location uploads the end-of-day result set files to the RTA
server. These result set files contain data such as net sale, gross sale, total number of guests,
total number of table turns, number of checks, etc of the specific location.
Upon receiving of the result set files, the RTA server processes the data and stores the
appropriate daily total data to the database warehouse.

Theoretical Labor

Labor Program

Chapter 5 Theoretical Labor Allotment

11

Once all the result set has been posted onto the database warehouse, RTA server uses the
already posted daily data to starts the daily allotted hours calculation.
The results of the calculated daily allotted hours are then posted onto the database
warehouse.
Administration
Since theoretical labor allotment is a subset of the theoretical labor standard, many of the
administrative features are similar to the theoretical labor standard. To create an allotment:
1. Login as Sys Admin
2. Navigate to Admin | Warehouse | Theoretical Labor Allotment | Add or Edit
3. Assign the Allotment Name

4. Determine if the allotment is a Fixed Period - prep allotments are not fixed.
5. Save

Theoretical Labor

Labor Allotment

Chapter 5 Theoretical Labor Allotment

12

Note Fixed allotment will allow you to manually upload your allotment
hours. (See Appendix)

Theoretical Labor Allotment Standard

Allotment Standard Name

Allotment Standard Name is a unique identifier for the particular Allotment Standard.
Labor Metric
Indicates what Labor Metric this Allotment Standard belongs to.
Allotment Name
Indicates what Allotment Name this Allotment Standard Belongs to.
Labor Program
Labor Programs can be used to assign TL Allotment Standards to particular stores instead of
the organization as a whole. This indicates what Labor Program the TL Allotment Standard
belongs to. If none, this Allotment Standard will apply to all locations in the organization
that do not have a Labor Program assigned. (See section 3. Administer theoretical labor
programs for more information)

Theoretical Labor

Labor Allotment

Chapter 5 Theoretical Labor Allotment

13

Labor Total Type

The TL Allotment Standard may be compared against one of three types of actual labor:
Labor Category, Job Code and Job Category. Once the Labor Type has been set, select a
Labor Category Master, Job Category Master or Job Code Master or enter a Labor Total POS
Reference number (the object number associated with the labor category, job code or job
category).
Basis type
Basis Type can only be set if the Allotment this Allotment Standard belongs to is not set as
Fixed. Five basis types can be used to calculate the theoretical labor allotment:

Net Sales

Gross Sales without Discount Total

Number of Guests

Number of Checks

Number of Table Turns

In each case a revenue center may be selected so that the volume indicator will only reflect
the activity of a specific revenue center (and the labor standard will just be based on that
activity). If the revenue center is to be used, selected either a Basis Revenue Center Master
or enter a Basis Revenue Center POS Reference number.
If either the basis type Net Sales or Gross Sales without Discount Total are selected, a
major group may also be selected. This allows a volume indicator to be refined to a major
group level such as food or beverage sales. If a major group volume indicate is to be used
select either a Basis Major Group Master or enter a Basis Major Group POS Reference
number.
If the assigned Allotment Name is set to Fixed, Basis type will be grayed out.
Day Specific
Theoretical labor allotment can be calculated for specific day of the week. If the Allotment
Name is set to Fixed, this is grayed out.

Calculation Types
There is only one calculation type for theoretical labor daily allotted hours: Factor. As in
Theoretical Labor Fixed Period Total calculation, the theoretical labor daily allotted hours
increases as the scale factor does. If the Allotment Name is set to Fixed, no Calculation type
is used.

Theoretical Labor

Labor Allotment

Chapter 5 Theoretical Labor Allotment

14

Calculation Algorithm
The calculation of the theoretical labor daily allotted hours is as follows:
DailyAllottedHours = scaleMin + (dailyBasisTotal * (scaleFactor/100))
where
scaleMin is the minimum number of labor hours required when the dailyBasisTotal is 0
scaleFactor is the number of hours to add for each increase of 100 in dailyBasisTotal.
Daily Basis Total Calculation
Basis type and, if valid, basis major group dictate the value of dailyBasisTotal.
basisType

basisMajorGroup

dailyBasistotal

Number of guests

Not matter

OPERATION_DAILY_TOTAL.numGuests

Number of table
turns

Not matter

OPERATION_DAILY_TOTAL.tableTurns

Num of checks

Not matter

OPERATION_DAILY_TOTAL.numChecks

Number of guests

None

OPERATION_DAILY_TOTAL.numGuests

Number of table
turns

None

OPERATION_DAILY_TOTAL.tableTurns

Num of checks

none

OPERATION_DAILY_TOTAL.numChecks

Net sale totals

None

OPERATION_DAILY_TOTAL.netSaleTotal

Gross sale totals

None

OPERATION_DAILY_TOTAL.netSaleTotal
+ OPERATION_DAILY_TOTAL.
itemDiscountTotal

Net sale totals

Valid

MENU_ITEM_DAILY_TOTAL.salesTotal

Gross sale totals

Valid

MENU_ITEM_DAILY_TOTAL.salesTotal +
MENU_ITEM_DAILY_TOTAL.itemDiscou
ntsTotal

Theoretical Labor

Labor Allotment

Appendix

15

Appendix

Figure 1: Example of the Theoretical labor Allotted Hours Import Template (period tab)

Theoretical Labor

Appendix

Appendix

16

Figure 2: Example of Theoretical Labor Allotted Hours Import Template (allotted hours tab)

Theoretical Labor

Appendix

Appendix

17

Figure 3: Example of Labor Summary Report

Theoretical Labor

Appendix

Appendix

18

Figure 4: Example of Labor Summary by day Part and Hour Report

Theoretical Labor

Appendix

Appendix

19

Figure 5: Example of Theoretical Labor by Day Part Report

Theoretical Labor

Appendix

Appendix

20

Figure 6: Example of Theoretical Labor Detail Report

Theoretical Labor

Appendix