full version HRM Practices Of The McDonald's Chain Essay

HRM Practices Of The McDonald's Chain

Category: Business

Autor: clairabelle 07 May 2011

Words: 2868 | Pages: 12

SUMMARY

This report was written in order to identify the HRM practices of the McDonald's chain. Moreover, the choice of the company, its market and its current global position was approached in the purpose to outline the importance of the company.
The report was focus on McDonald's to evaluate the change needed to the future regarding the current approach to HRM. Also, staffing issues were considering within McDonald's as a part of any future decision on continuing global expansion.
To build this report, was using first hand research from academic sources, secondary articles from newspapers, journal, videos and web site and finally knowledge about Human Resource Management and McDonald's policies.
The main findings of the report were to target HR approaches with models and theories in order to write future changes within McDonald's company. It was concluded that organisation requires be aware about competitors and economical changes in the purpose to stay the most attractive and successful fast-food chain.


CONTENTS PAGE


Summary
1 Introduction 2
2 McDonald's organisation 2
2.1. HRM approach of McDonald's 2
3 Evaluation of possible changes needed 5
4 Staffing Issue 6
4.1. Ethical aspect of culture 7
4.2. Supply of potential employees 7
5 Conclusion 8
6 Recommendations 9
Bibliography 10

LIST OF FIGURES

1.0 EPRG framework and companies size 3
2.0 Talent Management Model 8



1 INTRODUCTION
In 1954, the first restaurant of the chain was opened in the world. Today, more than 32,400 restaurants are managed by McDonald's to provide to customers "high quality food, quick service and value for money everyday" (Investor in People, 2008). Currently McDonald's is archetypal multinational restaurant chain. Indeed, needless to specify that the fast food restaurant chain ranks first in the market place with over £23 billion turnover in 2009 (McDonald's Corporation, 2009) ahead of many organizations. Currently, the company is employing over worldwide 1.7 million people. In addition, worlds' largest company has an essential impact on economy due to its notoriety and its strength. Furthermore, its strength is to adopt a strict and effective HRM process to recruit, train and manage employees at all levels in order to deal with contingent and complex situations (About McDonalds web site, 2011). Indeed this strict and effective Human Resource Management (HRM) process allows the company to face competitors, such as Burger King in the UK. The company most years adapts procedures within purpose of improving relationships between organisation and employees. In fact, cultural diversity and equal opportunity are the main ideas of McDonald's. However these different functions, such as planning, integrating or evaluating (Bratton and Gold, 2007) give a way for the business to approach issues, allowing the development of McDonalds's global activities and practices. Thereby, McDonald's revolutionized the market due to profits and benefits being the result of good HRM planning.
This report will tackle HRM procedures in McDonald's industry and will try to explore possible future trends in the HRM within the chain. Finally it will discuss how the organisation can consider the staffing issue according to future decisions.
2 MCDONALD'S ORGANISATION
2.1. HRM APPROACH OF MCDONALD'S
If McDonald's is the major brand of fast food outlet it is due to tapproaches taken by it. Before treating with some theories, it would seem wise to give a definition of HRM. Following Bratton and Gold (2007) "HRM is a strategic approach to managing employment relations […], this being achieved through a distinctive set of integrated employment policies, programmes and practices". In fact, HRM's procedures aim to develop organisation with the relationship and the involvement of employees.
Currently, McDonald's is a single international chain that operates with a specific level of resource involvement. Douglas and Perlmutter (1969 – cited in Henderson, 2008) gave an analysis of a company's approach with EPRG framework, which are Ethnocentric, Polycentric, Regiocentric and Geocentric (Figure 1.0.). While some authors, such as Watson and Littlejohn (1992, cited in Boella and Goss-Turner, 2005), thought only of three categories, ethnocentric, polycentric and geocentric.

Figure 1.0 EPRG framework and companies size
In any case, geocentric approach is used for the giants of fast food. Hill (2005) states that the geocentric approach focuses on recruitment, integration, training and performance of worldwide employees within the purpose of following a global or transnational strategy to give the best possible experience to the staff. In addition, Sharan (2009:411) argues that the recruitment is targeted "irrespective of [the] nationally; from the home country, host country, or from a third country". This approach is the most attractive for the McDonald's chain because it ensures the creation of a strong cultural and informal management network, in order to give an equal opportunity for everyone. Nevertheless, according to Bowie and Buttle (2004) the geocentric approach is not easy for dealing with the government knowing, that the company has to abide by rules and by a range of conditions in different countries, giving a worldwide orientation of the country. Besides, McDonald's tries to face this issue in order to manage efficiently the diversified workforce. For instance, Motwani et al. (1993:1) said notably that "[program created by McDonald's] have effected change in the culture of the organization and have demonstrated the productive value from utilization of untapped human resources long-ignored due to cultural biases". This approach allows McDonald's to remain the best against Quick, Burger King, and Taco Bell.
One other main approach to the development of HR strategies of McDonald's is the best fit versus the best practice. Armstrong (2006:138) stated "the best fit approach emphasizes the importance of ensuring that HR strategies are appropriate to the circumstances of the organization, including its culture, operational processes and external environment". This way is linked to HRM practice and the achievement of competitive advantage is suitable for McDonald's conditions and organisational contexts (Torrington et al. 2008). The fast-food chain develops a product market strategy with the purpose of matching HR policies and practices. Contrary, the company used best practices links to the sustainability; indeed Thompson (2011, cited on McDonald's Best Practive, 2011) argues "the best practices in this publication really shine a light on the great advances that are happening across the McDonald's system". Some models approach the best fit such as the behavioural perspective from Schuler and Jackson's (1987) model or matching model. Wright and McMahan (2002) stated that overall strategies could be adopted by businesses to be competitive, to have innovation, quality enhancement and cost reduction strategy. Lashley and Taylor (1998, cited on Nickson, 2007:13) highlights that "the historic success of the McDonald's organization in delivering their market offer" due to close fit maintains "key characteristics of the strategic drivers and actual service delivery through utilization of an appropriate HRM style."
McDonald's try to push their employee or raise productivity to sell more products during some periods, as during Christmas where the chain employs more staff to increase sales. Indeed, McDonald's have to be aware of this practice because it can overlook employee interest and also support organisational flexibility.
Other HRM approaches could be used by McDonald's such as high road versus low road or convergent versus divergent. Then, some models are peculiar to the chain to facilitate management. After highlighting some models, the conclusion is obvious-McDonald's is still growing. Indeed, the HRM is particularly focused on employees' well-being and gives them benefits helping to motivate them. The multinational fast-food chain used in an appropriate manner corporate strategy, resulting a major success.
3 EVALUATION OF POSSIBLE CHANGES NEEDED

McDonald's adopts since many years different HR strategies in the purpose to improve this impact in the world. However, a number of management's problems were the result of these business changes. The McDonald's chain needs to be aware of HR change because their impacts are essential of the success of the company. Leopold and Harris (2009:410) argue that the evaluation of changes is due to "an exploration of the social, economic and political contexts and external influences on practices, [considering] the growing emphasis on HRD's strategic contribution to organisational change and development". In the same way, Bratton and Gold (2007:527) set up a model will give evaluation's criteria in the purpose to change and ameliorate the effectiveness business.
McDonald's used many HRM approaches support by models with some created especially for the group. The match between personal and business idea allows the company to stay first. However, some HR approaches could be change regarding the staff. Thomas (2010, cited on Learningexecutive, 2010) support that employees coming to McDonald's does not necessarily seek to grow within the company but to gain skills and earn money. As a consequence, the turnover is high that is affects directly the management and the working of different restaurants. Pollitt (2009) highlights that some programs were settled to reduce this turnover, involving the workforce facing to the client and giving to them value into the chain. Despite these last actions, McDonald's seems forget that turnover is relating to the low pay for employees and also an image unrewarding of chain's jobs (Smith, 2006). McDonald's for future might to ameliorate staff's paying in order to complete a good HRM approach.
Only, the financial conditions are not cause of problems for employees, their insurance coverage is a trouble spot for McDonald's. Indeed, Terry (2010) states that the company gives the minimum of coverage and can have an impact on employees' situation. While some restaurants do not offer coverage, McDonald's Adamy (2009) explains that employees' situation can be improve anytime by the chain with the implement of strategies which cover and protect the staff. On the whole, the HR approaches for employees of McDonald's is developed, thought there is a need to adapt continually practices in the purpose to ameliorate situations.

4 STAFFING ISSUE

McDonald's is faced with different issues varying by degrees and complexity. Foremost, in order to stay in first place in the fast food market, some decisions and procedures have to be undertaken. McDonald's always has to question these HR procedures against economic, political, social and health issues. A number of areas regarding HRM need to be discussed on in particular employee relations, employee involvement, employee voice or planning, resourcing, recruitment and selection.
4.1. ETHICAL ASPECT OF CULTURE

Many areas of HRM have to be considered, such as equality and diversity, which is a current issue within many industries, notably in hospitality. However, McDonald's approaches it since 1992 with the introduction of equal opportunity within the company (About McDonald's, 2011). Business strategies previously settled by the fast-food restaurant chain focused on cultural hegemony. Indeed, Lucas et al. (2006) support this process with the liberal model adaptable to McDonald's working. Thereby, idea is to remove all barriers and discrimination giving the opportunity to everyone to achieve fairly a post within company. Therefore, McDonald's achieved in recent years a range of awards ranging from "Best Place to Work 2008 by the Great Places to Work Institute" (Anon, 2010: 5) to "Top 10 Diversity Champions by Working Mother Magazine" (About McDonald's, 2011). In spite of this strict and effective notion of inclusion instituted within HR procedures, some issues are visible for the future. Green (2004) argues that some tension between staff can come from the equal opportunity process. Indeed, if employees are judged in the wrong way, the company can suffer from a high turnover. McDonald's is set up around the world, and within some countries there are widespread inequalities in employment, what McDonald's cannot change. As Accor (hospitality chain), which approaches diversity with 5 Core values (Innovation, The spirit of conquest, Performance, Respect and Trust), it allows the adaption of diversity process by country. That is why, the approach to manage diversity needs to be highlighted and adapted by the company if it wants to ensure a good approach everywhere.

4.2. SUPPLY OF POTENTIAL EMPLOYEES

McDonald's considers every employee such as a key for the effectiveness of it. The firm is still growing with approximately 50 restaurants opening and approximately 3,750 jobs creating per year (Curin, 2002). Moreover, every procedure establish by McDonald's HRM aim to detect those having high potential and high value. The training is often an issue for the employer because this planned process needs to give abilities, skills and knowledge for precise tasks in order to achieve performance in a McDonald's (Armstrong, 2009).
There are training into each McDonald's around the world but there is a centre, which learned basics of firm's operations and business. About McDonald's (2011) examined that an average of 70,000 managers were coming from this institution. Thus, many training initiatives are keys of success; the question is whether McDonald's use some. The training by excellence supports the notion of talent management (Figure 4.0), which Mathis and Jackson (2008) thought that it is an enhancement of the attraction and the development.









Figure 2.0 Talent Management Model
Thomas (2010, interviewed on LearningExecutive video, 2010) highlights that "McDonald's developed deep bench and cultural of learning [within the company], not only just to improve business' results but also to help people to grow". Even if this procedure of training seems to be achieving by the HRM, some issues are staying and having a direct impact on the future. Fairhurst (2009, cited on Mitchell, 2009) points out that this resource needs to be managing every time regarding the current economic climate. McDonald's cannot build for the future this type of training, moreover, all the time strategic initiatives need to be think.




5 CONCLUSION

"Studying McDonald's has also become a hot academic topic" (Smith, 2006). Many challenges face the organizations every time and choices have to be undertaken to follow right strategies and solutions. Therefore, the chain is qualified such as the best-known fast food brand in the world. In particular, McDonald's offers a range of quality product, quality service, and attractive price adapted for everyone. However its awareness results to the performance to settle and conduct practices within HR department, which is the heart of each company. Indeed, McDonald's uses the best of its human resources from employees' motivation with intern rewards to training by talent management. Besides, the organization continuously tries to find issues to improve the effectiveness and the behaviour of the staff; indeed, it is by taking care of these employees that future remains rising for the McDonald's chain.
6 RECOMMENDATIONS

It is recommended:
• That McDonald's should applied job enlargement and enrichment to reduce the employees' turnover.
• That the training needs to have proper and flexible arrangements in a multi skilled way.
• That the company should ameliorate employees' pay and free time to increase the motivation as well.
• That the company needs to be aware of the competitors.

BIBLIOGRAPHY

About McDonald's (2011) About McDonald's [online]. Available from: <http://www.aboutmcdonalds.com/mcd> [Accessed on 7 February 2011].
Adamy, J. (2009) McDonald's Seeks way to keep sizzling. The Wall Street Journal, 10 March, p.27.
Adamy, J. (2010) McDonald's may drop health plan [online]. Available from: <http://online.wsj.com/article/SB10001424052748703431604575522413101063070.html?mod=WSJ_business_LeadStoryCollection> [Accessed on 9 February 2011].
Anon. (2010) Promoting Equality & Diversity in the Irish Hospitality Sector. Irish Hospitality Institute.
Armstrong, M. (2009) Armstrong's Handbook of Human Resource Management Practice. 11th ed. London: Kogan Page.
Bowie, D. and Buttle, F. (2004) Hospitality marketing: an introduction. 1st ed. Oxford: Elsevier Butterworth-Heinemann.
Bratton, J. and Gold, J. (2007) Human Resource Management, theory and practice. 4th ed. Basingstoke: Palgrave Mcmillan.
Curin D. B. (2002). McDonald's International : Strategies for Cloning a Golden Egg, IBEC, St. Norbert's College.
Investor in People (2008) Case Study: McDonald's [online]. Available from: <www.investorsinpeople.co.uk/Documents/McDonalds%20pdf.pd> [Accessed on 3 February 2011].
Green, C. (2004) Cultural Diversity and Broadcasting Regulation. Forum Barcelona 2004.
Hill, C. W. L. (2005) International business: Competing in the global marketplace. 5th ed. New York: McGraw Hill.
LearningExecutive (2010) At McDonald's: None of Us is as Good as All of Us -- TRAINING IS KEY [online]. Available from: <http://www.youtube.com/watch?v=b3V5xgGKLfU> [Accessed on 5 February 2011].
Leopold, J. and Harris, L. (2009) The strategic managing of human resources. 2nd ed. Essex: Pearson Education Limited.
Marchington, M. and Wilkinson, A. (2005) Human resource management at work: people management and development. 1st ed. London: Chartered Institute of Personnel and Development.
Mathis, R.L. and Jackson, J.H. (2008) Human resource management. 13th ed. Mason: Thomson Learning Acadamic Resource Center.
McDonald's Best Practives (2011) The road to sustainability [online]. Available from: < http://bestpractices.mcdonalds.com/ > [Accessed on 6 February 2011].
McDonald's Corporation (2010) McDonald's Annual Report 2009 [online]. Available from: <http://www.aboutmcdonalds.com/mcd/investors/publications/2009_Annual_Report.html> [Accessed on 3 February 2011].
Mitchell, L. (2009) David Fairhurst interview: Managing the workforce in recession[online]. Available from: < http://www.hrzone.co.uk/topic/managing-people/ > [Accessed on 6 February 2011].
Motwani, J., Harper, E., Subramanian, R. and Douglas, C. (1993) Managing the diversified workforce: current efforts and future directions. SAM Advanced Management Journal. Vol.58.
Nickson, D. (2007) Human Resource Management for the hospitality and tourism industries. 1st ed. Oxford: Butterworth-Heinemann.
Pollitt, D. (2010) Golden jobs under the McDonald's arches. Human Resource Management International Digest. Vol.15 No. 1, pp. 23-26.
Pollitt, D. (2007) McDonald's serves up better customer care and low employee turnover. Human Resource Management International Digest. Vol.18 No. 1, pp. 36-38.
Ritzer, G. (2010) McDonaldization: the Reader. 3rd ed. London: SAGE Publication.
Sharan, V. (2009) International Business: Concept, Environment and Strategy. 4th ed. India: Dorling Kindersley.
Smith, A. F. (2006) Encyclopedia of junk food and fast food. 1st ed. Wesport: Library of Congress.
Sullivan, N. (2011) McDonald's team working on strategy for pension changes [online]. Available from: <http://www.employeebenefits.co.uk/item/12191/23/5/3>[Accessed on 8 February 2011].
Terry, K. (2010) McDonald's may drop hourly worker coverage, exposing a healthcare reform gap [online]. Available from: < http://www.bnet.com/blog/healthcare-business/ > [Accessed on 9 February 2011].
Thomas, D. (2006) McDonald's is 'lovin' it' as research shows young recruits benefit from working for the company [online]. Available from: < http://www.personneltoday.com/articles/2006/06/08/35809/mcdonalds-is-lovin-it-as-research-shows-young-recruits-benefit-from-working-for-the.html > [Accessed on 12 February 2011].
Torrington, D., Hall, L. and Taylor, S. (2008) Human Resource Management. 7th ed. Essex: Pearson Education Limited.
Treven, S. (2001) Human Resource management in International organizations. Management. Vol.6 No. 1-2, pp. 177-189.