McDonald's Human Resource Management (HRM)

In this report it has been analyzed and found out the kind of Human Resource management theories and techniques are in reality implemented or practiced by the McDonald’s Human Resource Management. The field study it has done entails by visiting the HR office of the McDonald’s located at the Notting Hill Gate, London. Throughout the visit it has been observed the all practices. It has been also observed the working culture and the motivating factors at the McDonald’s and also the team work. Due to grading the Recruitment, Training, Business strategies and the Performance management. After analyzing the books and the website of McDonald’s it is able to explain the theories of the Human Resource Management and also the some of the corporate values of the McDonald’s. In the course of the study and the research It have found that the McDonald’s process of recruiting the worker and staff and how they provide training to their employees. The success of the McDonald’s is because of the employees and the different market strategies so this assignment is to understand the HR Strategies of the McDonalds. The purpose of this study is to know the recruitment and selection process in detail and also about the training programme at McDonald’s for their employees to achieve the objectives of the company. Here we also going to discuss the Business strategies used by the McDonalds to hold the better position in the market and the strategies used by McDonald have to respond the new competition in the market. The performance management system of McDonald’s also contributes its efforts in achieving the aims; it contains the strategies to motivate the employees.

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COMPANY PROFILE

McDonald’s originated in California, USA, 1954. McDonald’s Corporation along with its affiliates operates as a food service retailer worldwide. The franchises of the McDonald’s operate the McDonald’s restaurants that offer a variety of food items, soft drink, coffee, and other food and beverages. According to a survey it shows that as of December 31, 2009 the company runs or operates 32,480 restaurants in 117 countries and out of them 26,215 were operated by the franchisees and 6,265 were operated by the company.

McDonald’s corporation franchises and operates its restaurants in the food service industry. McDonald’s supply the products to most of the McDonald’s restaurants where McDonald’s independently – owned and operates distribution centres, which is approved by the company. Where the employee and personnel of restaurants are trained very well in the storage, preparation and handling of products and in the delivering the good customer services. In February 2009 the company sold its interest in REDBOX AUTOMATED RETAIL, LLC

The franchises of McDonald’s operates McDonald’s restaurant in the food and service industry. These restaurants variety and yet limited value priced menu in more than 117 countries globally. Most of the restaurants are operated by the company or by the franchisees, under the franchise agreement franchisees are included and under license agreements foreign-affiliated markets and developmental licenses are included.

Human Resources Strategies of McDonald’s

Recruitment

As we know that McDonald’s is the biggest family restaurants business in the world. To provide the best family restaurants experience by far is McDonald’s vision. To achieve this we put people at the centre of everything we do and that goes for our employee as much as our customer.

People perform well when they feel better in their job and McDonald’s has recognised it so McDonald’s go all out to create the right and good working environment for everyone. That’s a lot of people to consider which is why McDonald’s strive to provide variety of rewards and benefits that suits all kind of lifestyles. McDonald’s is successful in achieving the best working experience for their people; they aim to provide customer the restaurants experience. Employees working in the McDonald’s they not only become the part of one of the largest global brands but also a constantly developing organisation that offers an environment of flexibility, equality, diversity and opportunity. Reflective of the society and communities in which McDonald’s operate. In UK McDonald’s offers a probably most diverse work in culture. The people come from all walks of life to McDonald’s and they share a common approach i.e. a positive one. HIRE THE SMILE is the policy of the McDonald’s when they hire the crew members and this help to nurture a work force of employee with a positive approach and outlook, in return we earn cheerful and friendly atmosphere. McDonald’s thinks that it’s not only just about hiring happy and cheerful people it’s about keep them smiling by doing everything. McDonald’s offers rewards and benefits that fit in with their lifestyle, which so ever it may be whether they are a part-time employees working to fund their school and college education or Trainee Business Manager straight out of university.

Recruitment and Selection at McDonald’s

Recruiting suitable applicants: Which ever post it may be whether employee wants to join as a crew member or a Trainee Business Manager, McDonald’s always provide exceptional support, real progression opportunities, a range of excellent rewards and all potential associated with working for the McDonald’s a world’s famous global brand.

Crew Members

The McDonald’s has designed a three-step application process for potential crew member to make sure that they are right for everyone. The first phase of the application is an online; people go through an online process which contains some questions. If the candidate is successful in the first phase they send the invitation to the candidate for an interview with HR officer after that they send the successful candidate for (OJE) On Job Evaluation and for interview at the restaurants with manager. The On Job Evaluation is for serves two purpose one is that it helps an d gives the good opportunity to assess the candidates skill in customer services against what is needed to be a successful member of the McDonald’s team and also allow the candidates to see that if McDonald’s high energy environment suits their preferred style of working. This OJE process takes about 15 minutes and the candidate works at one of the customer facing areas and full instruction is given to candidate on what to do. In addition the candidates have and interview with the business manager and the whole process will take about 30 minutes for assessing the candidates.

Crew Benefits:

• McDonald’s provide 28 days paid holidays per annum.
• After three year service they provide free private health care.
• Stake holder pension scheme.
• Bonuses related to Restaurants performances.
• Provides vouchers of Argos, Thomas Cook, Debenhams, Marks & Spencer and
• House of Fraser awarded at service milestones
• Annual pay reviews
• Great discounts, about £13 at Alton Towers and at Thorpe Park It’s about £12
• Saving of 50 per cent at LEGOLAND
• 10 per cent off at dress-for.com
• £63 saving on special BSM learner starter pack
• 25% off many short breaks and holidays
• 65 per cent off in universal cycles.

Welcome Meeting

After completing all the application process and the candidates are selected and crew member have been hired they are called to attend the Welcome meeting at their chosen restaurants or a recruitment centre. In this meeting the inform and engage new starter for the one hour in this meeting. The meeting involves viewing a DVD which provides important information about the McDonald’s and also allows for interaction between manger and the new starter. The second part is orientation which is compulsory it’s an online process which provides information regarding the Health n Safety test that the new starter has to complete in their own time. The beginning of the orientation starts with the tour of the store highlighting key health and safety and food safety procedures. And it is also recommended that it should be last for the first two ours of the shift.

Trainee Business Manager

A trainee business manager participates in an award-winning management training scheme and the business trainee manger is required to show strong leadership quality.

It is not a small feet to a win a place on McDonald’s management development programme. It’s not a short term commitment but rather it represents a long- term career decision. McDonald’s want make sure that the candidate and McDonald’s are right for each other, therefore the candidates has to go through the four steps of selection process. The first step it is all about the screening process which ensures that candidates meet the basic criteria. The successful candidates are asked to complete the next step which contains the personality questionnaire the candidate has to complete it online. This will make sure that the candidate has the desired attributes and their preferred style of working suites. After that the next step is based on restaurants OJE or On Job Evaluation. The candidate will do real job for a day and learn what it’s really working in a McDonald’s restaurants. After completing OJE process the final step is selection process i.e. an interview with the senior manager. First of all the Trainee Business Manager has to complete an intensive 18 week Management Development programme. This programme will give the candidate thorough training in the business of McDonald’s and also train the candidate regarding the commercial skill that are needed to bloom and develop into an effective assistant manager. Later an assistant manager can progress to become business manager or an operating consultant i.e. area manager depending on their desire to achieve.

Benefits

The candidates are provided with a package of professional rewards which includes a starting salary of up to £21500 including London weighting. There is also potential of quarterly bonus within the week of joining. The candidate could be running their own restaurants under the three year and also earning a salary and package of £45000. The successful candidates can expect additionally

• Holiday of 5 week per annum and it can be raised to 6 week from April 2009
• Annual performance in relation of pay review
• Life assurance.
• Pension scheme
• After six months services they cover a private healthcare and also a company car or cash alternative.
• Home telephone bill assistance.
• For every 10 years of services there is a paid sabbatical leave of eight weeks.

Training at McDonalds

Includes complete development McDonald’s constant success of is constructed on the highest principles of quality, delivery of services and cleanliness to customer in each of the McDonald’s restaurants. These standards are achieved because of the well trained crew member and also well trained manager. The policy of McDonald’s that provide the career opportunities that allows the workers to improve and develop their full potential. This policy programme for both crew and operation management, and a career advancement that enables a ‘first job’ for the progression of the employees to the senior management position through merit based promotions.

Around 55,000 employees are trained in McDonald’s every year. McDonald’s spends around £10 million over on going employees training every year for providing people with valuable skill.

McDonald’s work experience is a foundation for future employability, mostly as the UK labour market continues to evolve. As there is increase in the demand of skilled employees, a job which offers an on-going training with a leading organisation is very best career investment. People from all over the world of life recognition of first job at McDonald’s through having prepared them with ingredients of success.

Staff Training

Staff training programme at the McDonald’s is an on the job professional experience that make other learn the skills transferable to other industries. In McDonalds the entire new employee begins their experience with an induction into the company. Here the trainers work together shoulder-to-shoulder with other trainees where they absorb the operation skills for running the each and every 11 workstations in every restaurant, from front counter to grill area. Each and every employee learns to operate contemporary food service equipment, gaining knowledge of McDonald’s operational procedure.

Every manuals and video tapes cover every detail, starting from how to prepare a big Mac, and they also teach that how to deliver exceptional services to customers. Not only this employees also learn how to train and supervise other people. The people who first time employed in McDonalds, McDonalds are an important ‘mentor’ who teaches the interpersonal and organisational skill which is important for performing effectively on any job. The business of McDonalds demands effective teamwork, discipline and responsibility. The result of McDonald’s experience is in improving self-confidence and communication skill and McDonalds stresses on customer care and attitude where organisation experts known as an essential element for business success.

Business strategies of McDonald’s

As we know that McDonald’s is the most successful fast food chain in the world. In the success of the McDonald’s we may possibly easily identify number of successful business strategy operations. Time to time McDonald’s enhances its own brand imagine with the help of different social activities and sponsors the special events and sports like as a main sponsor of the world cup since 1994 and the champions league football in England from 1996 to 2000.

The reason of the McDonald’s success is that McDonald’s implements many strategies like Porter’s Competitive strategies model that includes differentiation and low cost leadership or miles n snow’s strategy typology which describe prospector, defender, reactor and analyser strategy. It’s obvious that McDonald’s has to implement or choose the most appropriate strategy for its success.

How McDonald’s implements its business strategies?

The business structure of McDonald’s is totally based upon a geographic structure. Because when we access their website they ask the person to choose their country that they are interested in. In fact in the five geographical divisions McDonald’s has divided its operations.

As shown in the figure that 65 % of McDonald’s restaurants located in United States and Europe generates 75% of revenue. The most important strategic approach of McDonald’s for maintaining its leading position in the market has to keep the major markets at the same time they are expanding their business in the emerging markets. Though there are different consumer groups in the different countries having a different tastes and requirements. So each unit of full geographical functions of McDonald’s was required to response full for marketing and producing its products in that particular region. Over this regional or geographical structure the McDonalds is not only satisfying the needs of consumer of that or different geographical areas but also tracking a maximum local development. The main strategy of the McDonald’s is that they produce and markets the slightly different kinds of products in different geographical areas and even those products have different prices. Jim Skinner the chairman of McDonald’s said once that if you are looking for a command centre with one push button to operate our restaurants in every corner of the world or in the different countries having a different culture you will not find it.

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Though there is a QSC&V-quality service, cleanliness and value philosophy is everywhere. McDonald’s is right in understanding the consumer that customer need the fast services, bearable prices and better standard hygiene. In most of the countries McDonald’s having a similar product where they provide good services, including beef, chicken and bread potatoes and milk. In different countries consumer having a different taste and requirements and McDonalds time to time launches the new products for their regional customer.

Effect of external environment on McDonald’s strategies

There are two sectors which affects the McDonald’s strategies that are competitor and social concept.

Competitor: It’s unlikely that McDonald’s may be at No. 1. In an annual consumer satisfaction survey McDonald’s has been listed at last among the fast food restaurants since 1992 and in 4th quarter of 2002 McDonald’s had disclosed 1st time its quarterly loss the reason of this is that the consumer has switched to McDonald’s competitor i.e. Burger king, subway, etc. These companies focus on offering the fresh and high quality of food at lower price at low price and many fast services. Which resulted that McDonald’s has to close its 719 poor performing restaurants around the world? And all these result were proving that McDonald’s may not be longer in competition of fast food market. If McDonald’s does not adapt the external environment change, they can be diminishing gradually and even it can be replaced by the other competitors. To keep their market share increasing sales and profit McDonald’s has to answer the threat of the competitors. In 2003 McDonald’s introduce its new product McGriddles sandwiches as a feature of breakfast in US and Canada, and in UK they introduce premier and zesty McChicken and in other countries McDonald’s was trying to provide satisfaction to customer by offering premium products at affordable price. Even more McDonald’s is providing good choice with respond to Happy Meal for the children. For example Happy Meal is includes chicken selects, do added sugar fruit drink and also to produce coffee to appeal the adults. And those products have been produced to attract existing customer and also to develop new customer. Moreover the McDonald’s has innovated its menu and also McDonald’s is rebuilding and relocating its restaurants to make environment comfortable to the customer. McDonald’s is differentiating itself by creating more relevant experience to attract customers, like they are allowing customers to access internet with the wireless technology.

Social problem -healthy issue: As the economy is growing, living standard of people is also increasing. People are now more concerned about their health issues. There is no doubt that McDonald’s has made itself more convenient for the customer. Most of the people think that such kind of fast food restaurants are not good for health. WHO report showed that such food not only can cause obesity of children but also the cause of cancer. Issues regarding the health biggest hurdle for the development of McDonald’s customer were switching to the healthier competitor like Subway and KFC products. McDonald’s has answered to this healthy trend. In order of competition McDonald’s has added the salads and other healthier products in their menu. If the any mother comes to the restaurants she will not only find happy meal for her children but also she will find a meal for her also. The lighter and healthier option encourages the existing customer to come back often because there is greater variety of choices.

Focus on Children: Different taste and local needs doesn’t matters McDonald’s has paid its all considerable attention towards children in every country. McDonald’s has made happy land for the children offering fantastic happy meal with superb toys to them.

And even more McDonalds have just launched the computers with games that are designed for the children’s imagination at the same time they shape their personal features. There are 3 main reasons for McDonald’s to focus on the children i.e.

McDonald’s biggest consumers group are children and McDonald’s has been regarded as their favourite place to go. The brand culture ‘happiness’ is known by the children.

The belief of McDonald’s on focusing on children is that it can build the stable business and will also provide the best booster to encourage the whole family to come to McDonald’s for example McDonald’s can offer other products with children’s happy meal to the whole family.

By building brand loyalty with children McDonald’s is more likely to successful today and in future also.

PERFORMANCE MANAGEMENT

Employees are the important resources of the company. They insures the collaboration of financial, industrial & resources so that organisation able to function. Today some of the experienced managers think that the financial reward cannot stay the only type of an employee encouragement or inspiration. There is need of viewing the needs of employees as entity that leads to the search of the non-financial incentives. There are many non-financial incentives connected to employee’s satisfaction of need for example employee’s participation in decision making, self-fulfilment, personal growth and others.

Full use of human resource by the organisation is the most important advantage which allows the organisation to capture the position in the global market.

The McDonald’s flourishes owing to the logical combination of the staff into the problem solving. The company follows the principle i.e. ‘the result is done by a man, McDonald’s observes its employees as the primary means of achievement in the field of quality and productivity. McDonalds has built its success on the motivation theories having changed only some aspects of them. McDonald’s follows four simple principles, which provides the possibility of growth in the performances of its employees:

The organisation must innovate the different system of motivation for every department.

There must clear and attainable aim for the personnel, it’s better to have one aim for each person

There must be change in aim. Manager must have two aims for the year. For example the first manager inspects the number of employee and clients then the manager inspects the number of returning clients and then the manager should analyse the increase in the sales. This process gives the possibility to find out the qualities and abilities of employees and also to check the new method of work.

The rise in salary must be workable for the employee.

McDonald’s implements three components of the motivation theories i.e. financial incentives, non-financial incentives and social policy. All these three components are mentioned in the Maslow’s motivation theory. Though Maslow describes that all needs must be one by one. The research of McDonald’s and its strategy & structure shows that only immediate fulfilments of the employee needs and that will increase the performance of the employees. It’s not important to fulfil all the needs of every level. In reality every man has a numbers of needs in every existing moment.

McDonald’s has an effective motivation system that makes it possible to growth in the performance of the employees and also increases in the company’s productivity. McDonald’s administration staffs have applied the situational approach which has turned out to be the most relevant to the current condition. The administration department have used the particular techniques on the origin of motivation theories. After applying the assembly line procedure in food preparation McDonald’s has ensured the standard quality of production and the high performance. In addition McDonalds has applied actual motivation strategy that is grounded on motivation theories.

CONCLUSION AND RECOMMENDATION

In the above discussion we just come to know about the HR Strategies of the McDonald’s the assignment discussed four HR strategies of the McDonald’s: Recruitment & selection, training, business strategies and management performance system. McDonald’s believes that the growth and success of restaurants and company is gained and achieved with the help of their employees. The aim and objective of the McDonald’s is to recruit the best people, to maintain them by offering ongoing training appropriate to their position and to promote them when they are ready. The recruitment policies, procedures and practices show the purpose to achieve its aim. It is analyzed there must be some achievement and promotion activities for the crew member as McDonald’s has provided to its Business management trainee. If the McDonald’s fails to identify the new competitors, interest of consumer shifts, and innovative technologies and social trends then there is a strong possibility of loosing there market share. In 2003 McDonald’s has decided to divert its focus to increase the sales in existing restaurants. To achieve the main objective, McDonald’s strategy must attract more new customers and also encourage the present customer to visit restaurants more often, build brand loyalty and eventually create long-term profitable growth for the company.