Bobby's Burgers is a large restaurant chain with nearly 10,000 units worldwide. It is experiencing incentive problems among its outlet managers. The managers are not working very hard and are letting quality deteriorate at their units. CEO, Bobby Jones, is considering a stock plan where each unit manager would be given 500 shares of stock in Bobby's Burgers. He reasons that making the managers part owners of the company will motivate better service.
1. Critically evaluate the proposed stock plan.
2. Discuss other ways that Bobby Jones might motivate increased effort at the units.