McDonald’s

Human Resource Management

INTRODUCTION
Human Resource Management is a function within an organization that focuses on the
recruitment of, management of, and providing direction for the people who work in the
organization. In simple words we can say that HRM means employing people, developing their
capacities, utilizing, maintaining and compensating their services in accordance with the job and
organizational requirement.

Human Resource Management (HRM) is the term which is used to describe formal systems
devised for the management of people within an organization. The human resources
responsibilities are generally divided into three main areas of management- staffing, employee
compensation, and defining/ designing work. Basically, the purpose of HRM is to maximize the
productivity of an organization by optimizing the effectiveness of the employees.

Edward L. Gubman observed that the basic mission of human resources is to acquire, develop, and
retain talent, align the workforce of the organization with the business and to be an excellent
contributor to the business.

William R. Tracey defines that Human Resources are the people that staff and operate an
organization as distinguished from the financial and material resources of an organization.

The basic principle of the theory of HRM is that humans are not machines. Therefore we need to
do an interdisciplinary assessment of people in the workplace.

There are 4 fields for the HRM function, developed by Dave Ulrich, which describes the role of
HRM:

 Strategic business partner

 Change Agent
 Employee champion
 Administration Expert

The theory of HRM argues that the aim of human resource management is to help an
organization to meet its strategic goals by attracting and maintaining employees and also to
manage them effectively. HRM approach seeks to ensure a fit between the management of
employees and the overall strategic direction of the company. An organization gains competitive
advantage by using its human resource effectively and drawing their expertise to meet the
defined objectives. HRM is aimed at recruiting capable, committed and flexible people,
managing and rewarding their performance and then developing their key competencies.

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We can define HRM as follows:

HRM is the process of managing people in organizations in a structured manner. This covers
staffing or hiring of people, retention of people, setting and management of pays and perks,
performance management, change management and taking care of exits from the company.

HRM covers the management of people in organizations from a macro perspective i.e. managing
the people in the form of a collective relationship between employees and management. It
focuses on the objectives and outcomes of the HRM function. It means that the HR function is
concerned with the philosophy of people enabling, people development and in making the
“employment relationship” fulfilling for both the management and employees.

These definitions emphasize the difference between Personnel Management and human resource
management. Personnel management is basically “workforce” centered whereas human resource
management is “resource” centered. The main difference is HRM is about fulfilling management
objectives of providing and deploying people and a greater emphasis on planning, monitoring
and control.

HR professionals have to be operational and strategic and their activities vary from managing
processes to managing people. HR roles are as follows:

1. Management of strategic human resources: This role is focused on the bringing together of
HR strategies and practices to the business strategy. In this role, the HR professional is a
strategic partner who helps to realize the business strategy by translating it into concrete HR
practices.

2. Management of transformation and change: In this role HR professionals can deliver value to
the organization. They have to assist in the identification and implementation of change
processes.

3. Management of the employees: In this role, HR professionals have to see the daily problems,
expectations and needs of employees. They have to stimulate the employees’ contribution to the
success of the company by understanding their specific needs and ensuing that these are met.

4. Management of the administration of the organization: Here the HR professional has to ensure
that the administrative processes like hiring, rewarding, training and evaluation, promotion, etc.
are designed and delivered efficiently and correctly.

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MCDONALD’S CORPORATE PROFILE

McDonald’s is the largest food service company in the world. It has a colorful history and today
it has developed the culture associated with the Fast Food Chain. It was started in 1937 when the
brothers Dick and Mac McDonald opened a small family restaurant selling hamburgers and hot
dogs in San Bernardino, California. Their restaurant was set up differently to the restaurants of
those times, with open kitchens so that the customers could see right through, and counters with
many operational cash registers. In the early 50’s Ray Kroc, a multimixers supplier was amazed
at the speed of preparation and serving of products sold by McDonald’s brothers. He then
proposed them to expand their business.

McDonald today has over than 30,000 restaurants in about 120 countries in the world. It has
maintained high degree of customer satisfaction and also maintained the top position in the Fast
Food Industry for the past 50 years. It is well-known for its Big Macs, Quarter Pounders, and
Chicken McNuggets. Most of outlets of McDonald’s are free-standing units, but it also has many
units located in airports and retail areas.

McDonald's has annual profits of 21 billion dollars. Global success of the restaurant chain can be
measured due to the amazing numbers published by the company i.e. 52 million people are fed
every day in it. McDonald's dominance in the fast-food industry is not likely to disappear easily.
From sitting on an outdoor stool to indoor restaurant and from the hot dog to the Big Mao and
Happy Meals, it has made tremendous differences. It is known as one of the world's best-known
corporate icons.

McDonald's employees fall into three groups- restaurant workers, corporate staff, and franchise
owners. A local McDonald's restaurant usually employs between 50 and 65 people. Staff
members of the company work either at the corporate headquarters or at one of 40 regional
offices.

Crew members constitute the entry-level position in the restaurants. A large majority of workers
are part-time workers and their wages are low. Swing Managers constitute the first managerial
position in the hierarchy and their hourly wages are only slightly higher than crew member
wages. Assistant Managers and higher are given salaries. In each McDonald's restaurant, there is
one Restaurant Manager.

McDonalds offers its managers solid diversity training, including workshop designed to help
managers so that they have full advantage of what everybody brings. It also wants to ensure that
people at all levels of McDonald’s bring their energy and creativity into the work environment.
In 1997, the company introduced the post of Diversity Development Manager.

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McDonald's policy has the following aims:

 high recruitment standards

 local sourcing of staff whenever possible
 The skills, talents and performance of staff is important and not the gender, marital status,
disability, race, color, nationality or ethnic origin
 Providing a safe and secure working environment to employees
 Staff should have opportunities for training and development
 Jobs with the company should include career opportunities
 There should be challenges and rewards
 Staff pay should reflect performance
 There should be good communication with staff
 The education of staff matters

McDonald’s restaurants compete with the international, national, regional and local food
products retailers. McDonald’s competes on the basis of:

 Price

 Convenience

 Service, by offering quality food products.

Its competitors include:

 Burger King

 Wendy’s

 Hardees

 Taco bell

 KFC

McDonald’s has created the following programs-

 McJobs for disabled people age of 16-60

 McMasters is a nationwide program and it identifies, recruits, trains and retains workers
who are 55 years of age and older

 Equal Employment opportunity- to attract and retain a diversified workforce. McDonalds

has been listed as one of the Top Companies for Minorities at Work.

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HUMAN RESOURCE FUNCTIONS AT MCDONALD’S

(1) JOB ANALYSIS

 In McDonald’s job analysis done on the basis of interviews.

 MacDonald’s have predetermined standards on which employees are awarded on the

basis of their skills, knowledge and experience.

(2) RECRUITMENT, SELECTION AND RETENTION

For McDonald's, people are its most important and valuable asset. It is so because customer
satisfaction begins with the attitudes and abilities of employees. Thus effective workers are the
best route to success.

Development and functioning of an organization largely depends on the flow of new people. It
can be a costly and difficult task to procure new employees as it involves planning the need for
new employees, finding suitable people for job applications i.e. recruitment, deciding on who
will be hired i.e. selection and lastly integration of people in the organization.

Lewis has explained Recruitment as an activity that generates a pool of applicants, who have the
desire to be employed by the organization and from which suitable applicants can be selected.

He explained Selection as an activity which an organization uses to assess individuals with a

view to making a decision concerning their suitability to join the organization and to perform
tasks.

2.1 RECRUITING SUITABLE APPLICANTS

 At McDonald's the employment is based on entry-level positions, especially for workers

that had worked before in restaurants. Most of the people working at McDonald’s for a
long time will be promoted on a higher level.

 A candidate that comes from outside the organization will obtain with difficulty a
management position because the policies and training programs forecast recruiting and
hiring its people.

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 Usually McDonald’s is seen as an employment opportunity because they can work part-
time and even after graduation students can continue to move up inside the company due
to many advantages such as experience and knowledge.

 McDonald’s needs people who want to outshine in delivering outstanding service. To

ensure that the company recruits the right people, it has identified essential skills and
behaviors which the applicants should be able to demonstrate. For each position there is a
job description which outlines the typical duties and responsibilities and a person
specification which defines the personal skills and competences.

 As per McDonald's recruitment policy, each restaurant is responsible for filling hourly-
paid positions. McDonald’s use several avenues for recruiting hourly-paid employees.
Positions available are generally advertised in the restaurant. The recruitment history of
the company is the best method of hiring quality staff. For the recruitment purposes,
McDonald's also uses local job centers, career fairs and other local facilities.

2.2 SELECTION

McDonald’s future managers mainly come from two sources which includes hourly-paid employees who
earn promotion and the remainder graduates predominately.

 To be part of the organization’s environment, the candidates can choose either to apply
online on the McDonald’s website or go personally to the company and hand in the CV.

 When applying online for a job, the applicant needs to register and have an account and
fill in the data like personal information, education, qualifications, employment history,
availability, references and additional information. Then the candidate has to answer
some questions regarding his personality and also some tense situations he may deal with
at work. This way McDonald’s knows a little more about the candidate.

 If the outcome of the application form is positive, then the candidate will be invited by
the recruiter for an interview with the manager. By the same time the candidate’s
references are checked at the source such as the previous employers.

 The manager will check the credibility of the information written in the candidate’s CV
and application form. He conducts an entire set of questions regarding studies,
qualifications, experience and the applicant needs to impress the manager with his
attitude and positive view on things.

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 At the last level of selection process, the candidate has to solve an online practical
examination regarding the food safety and hygiene. If the applicant passes the online
examination, he is invited by the employer to sign the contract and he will be told when
to start work.

 After the final interview, the manager will be able to rate the applicant’s responses. A
successful applicant will have to demonstrate the skills and behaviors that have been
identified as being important to the position. McDonald's introduces all new employees
into the business through a Welcome Meeting, which they must attend.

The Welcome Meeting gives an overview of the Company which includes:

 Job role
 Food, safety training and hygiene
 Company’s policies and procedures
 Administration of the company
 Benefits Given
 Training and development of employees

2.3 RETENTION

McDonald's believes in the fat that the success of the restaurants and the company is achieved
through the people which it employs.

(3) PERFORMANCE MANAGEMENT

Performance management is a very important function of Human Resource Management. Its

objective is to improve overall productivity and effectiveness of employees by maximizing their
performance and potential. Performance management is concerned with-

 Improving individual and collective performance

 Communicating management's expectations to supervisors and staff
 Improving communication between senior management, supervisors and staff
 Assisting staff to enhance their career prospects through recognizing and rewarding
effective performance
 Identifying and resolving cases of underperformance
 Providing important links to other Human Resource Management functions, such as
training.

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Key Components

Performance management consists of several key components-

 Motivation
 Performance appraisal
 Promotion
 Guidance and supervision
 Addressing poor performance

3.1 Performance and Motivation in McDonalds

People are the most important resources of an organization. They ensure the interaction of
financial, industrial, and other resources so that the organization can function. Full use of human
resources of an organization is one of the most significant advantages, which allow companies to
occupy the leading positions in the world market. The McDonalds’ company flourishes due to
the logical integration of the staff into the problem solving.

McDonalds’ look at its employees as the primary source of progress in the field of quality and
productivity. This organization has based its success on the motivation theories having altered
only some aspects of them. McDonalds adheres to four simple principles, which give the
possibility to increase the performance of its employees:

 The Company must elaborate different systems of motivation for every department.
 The employees must have clear and attainable aims and it is more better to have one aim
per a person.
 The aims must change and the managers should have one aim for half of a year. For
example, at first a manager examines the number of clients, then he examines the number
of returning clients and then he should analyze the increase in business sales. This
method gives the opportunity to find new abilities of employees and to check new
methods of work.
 The rise of salary amount must be reasonable for an employee.

The McDonald’s applies the following three components of the motivation system-

 Financial encouragement
 Non-financial encouragement
 Social policy of the company

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All the three above stated factors are described in Maslow's motivation theory. But Maslow
states that all the needs must be satisfied one after another. McDonalds’ strategy and structure
shows that only a simultaneous fulfillment of employee's needs will increase an employee's
performance. It is not necessary to realize all the needs of every level.

McDonalds has effective motivation system that makes it possible to increase employees’
performance, and the company’s productivity. The situational approach applied by McDonald’s
administration staff has turned out to be the most relevant to the current state of affairs. The
company’s administrators have used the specific and relevant techniques on the basis of
motivation theories. McDonalds has ensured the standard quality of the production and the high
performance by applying the procedure of assembly line in food preparation.

3.2 PERFORMANCE APPRAISAL

Performance appraisal assesses an individual’s performance against previously agreed work

objectives and serves two functions. First, it enables management to evaluate an individual's
performance in the current job to identify strengths and overcome weaknesses. Second, it
provides information to assist management plan postings, transfers and promotions. In so doing,
management is able to compare performance and potential between officers of the same rank.

Performance appraisal methods at McDonalds are:

 Graphical rating scale

 360 degree feedback

 Rewards: The rewards are given on the basis of the performance. There is a raise of 10%
in salary and if performance is also counted then 20% increment given at any time of the
year.

3.3 BENEFITS

McDonald’s benefit program is designed to attract, boost, reward and retain talented people who
will produce better business results and enhance their leadership position. Benefit
communication planning team is designed to include a variety of people from
various corporate departments to ensure a diverse representation. The accomplishment of the
benefit communication planning team includes:

 Plastic insurance cards with a magnetic strip to automatically bill for prescriptions.
 Co-workers communication programs, which allow the trained employees to explain the
program to other workers.

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Others Benefits includes:

 Competitive Wages
 MAC Card
 Haircut Discounts
 Wages increases
 McDonald's Training Programs
 Life insurance
 Education Support
 McDirect Shares
 Uniforms
 Flexible Hours
 Paid Vacation
 Bonus Scheme
 Stock Purchase Plan

(4) TRAINING AND DEVELOPMENT

McDonald’s success is built on the highest standards of quality, service and cleanliness delivered
to customers in each of its restaurants. For achieving these standards, it focuses on well-trained
crew and managers. McDonald’s provide career opportunities that allow employees to develop
their full potential. This includes a comprehensive training program for crew and operations
management and career progression that enable a ‘first job’ employee to progress through to a
senior management position through merit-based promotions.

 The first stage of training at McDonald’s is at the Welcome Meetings which set out the
company’s standards and expectations. This is followed by a structured development
program that provides training in all areas of business. Crew trainers work shoulder-to-
shoulder with trainees while the trainees learn the operations skills necessary for running
each of the workstations in each restaurant, from the front counter to the grill area. All
employees learn to operate and learn the art of foodservice equipment, gaining
knowledge of McDonald’s operational procedures.

 The majority of training is floor based or "on-the-job" training in McDonald’s. It is so

because people learn more and are more likely to retain information if they are able to
practice as they learn. All new employees have an initial training period where they are
shown the basics and allowed to develop their skills.

 They are also given the opportunity to attend classroom-based training sessions where
they will complete workbooks for quality, service and cleanliness.

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 Training begins immediately with a one-hour orientation about the company. Every
restaurant has its own video player and training room for its training purposes. There are
step by step manuals and video tapes which cover every detail of the operation,
everything from how to make a Big Mao to a shake. Every restaurant has 25 stations
from the grill area to the front counter.

 All employees receive ongoing training after the initial training period. This is done using
“Observation Checklists” for the station employees are working at. The rating will lead
towards their Appraisal Grading. Trainers use a series of checklists as new crew
members to move through the restaurant. A level of competency is demonstrated and the
activity is checked off on the Station Observation Checklist (SOC).

 Once a crew trainer has been promoted to swing manager and performed successfully, he
will be eligible for the Management Development Program. This program provides
technical and functional management skills for employees at the swing manager level and
above.

 Employees will attend a training course held by the training department at the regional
office on the completion of a management entrance exam and before returning to the
restaurant in a management position.

 Once a front-line crew member has progressed to the position of assistant manager, he
will be eligible to attend Hamburger University, the Company's world wide training
center for management personnel. All managers of the company are required to receive
training from Hamburger University at least once every 5 years.

 The company has also made plans for a certification program which will govern how
employees can progress from the crew to the level of restaurant managers. Plans are also
in lay for a Workplace Skills Certificate. It would be given to crew members who have
mastered a set of important workplace skills, and thus provide a "walk able diploma" to
enable them to move onto another position within the consumer service industry.

 McDonald’s is also offering its mangers the solid diversity training program. Training
competencies are also extending to McDonald’s QUALITY MANGEMNT programs.

 McDonald also functions as a job training program by teaching youth discipline and the
basis of how to work in the company.

 The Management Development Curriculum is divided into four key programs:

 Shift Management – it develops the skills and techniques in trainee managers

required to become effective in all aspects of running a shift.

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 Systems Management – it targets the second assistant and newly promoted first
assistant managers. This program covers all areas of McDonald’s systems and hence
increasing the manager’s business knowledge and also develops individual
techniques.

 Restaurant Leadership – it introduces the managers to the key skills needed to

become effective restaurant leaders like team-building, communication, decision-
making.

 Business Leadership – it focus on the need to develop a business strategy that

encompasses both internal and external factors.

McDonald's Internal Seminars

McDonald's designed seminars to establish a common foundation of leadership and management

knowledge and skills for its officers. These seminars will focus on main business issues
identified by senior management and create a platform for effective implementation of strategic
business initiatives. These seminars sessions are led by a team of McDonald’s senior
management and external providers. These external providers are recognized leaders in their
areas and have extensive experience consulting with and teaching executives.

Business and Global Workforce Strategy

McDonald’s strategy to develop its global workforce is designed to be associated with and
support the execution of its over-arching strategic business goal. This strategic business goal is
“to become everyone’s favorite place and way to eat”. McDonald’s has made an overall “Plan to
win” that provides the global business with a framework for developing tactics to reach this goal.

The framework includes five key elements which includes - 1) People, 2) Place, 3) Product, 4)
Promotion, and 4) Price.

Customer and Employee Focus

McDonald’s routinely assesses and measures its activities so as to see its impact on customers.
Customer service and experience levels are key metrics that are rooted within the performance
expectations for employees throughout the system. The company strongly focuses on Quality,
Service, Cleanliness and Value (QSC&V). These variables are strongly linked to customer
expectations and loyalty. Efforts are made to enhance the company’s global workforce
management system which incorporate a focus on key behaviors (customer focus and service
orientation) and results metrics (speed and quality of service, food and environment).
McDonald’s has also given significant attention to its employees and their training and
development.

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MAJOR FINDINGS

 Corporate culture and management system are strictly imposed at McDonalds. Detailed
operating manuals are followed and an extensive field organization checks on each store
to enforce the company’s standards.

 The organizational development focuses upon generating revenues from the existing
operations.

 The biggest change is the expansion in the menus based upon the product development
strategy, and market expansion strategy.

 McDonalds give different trainings to their employees or managers to work in more

productive way and to achieve the goals of the organization.

 The domestic growth has slowed as a result of market saturation but McDonald’s global
food service business showed good results. This was possible only due to expansion and
positive comparable sales.

 McDonald's has also developed a deep connection between McDonald’s and the local
communities in which it operates.

 McDonald's believes that the triumph of the restaurants and the company is achieved
through the people it employs and it considers them as their assets

 The company aims to recruit the best people, to retain them by offering ongoing training
relevant to their position and to promote them when they are ready to take up higher jobs.

 Management Development Curriculum of McDonald’s takes new recruits from trainee

manager to Restaurant Manager. This involves on-the-job training and open learning
development modules which are supported by courses and seminars at the Company’s
National and Regional Training Centers.

 McDonalds company has effective motivation system to increase employees'

performance and hence the company's productivity. The situational approach applied by
McDonald’s administration staff has turned out to be the most relevant to the current
scenario. McDonalds has ensured the standard quality of the production and the high
performance by applying the procedure of assembly line in food preparation.

 The company is well known for the opportunities it has given to its employees to grow
with the company and to rise (over time) from working as a member of a store crew to its
highest executive ranks.

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BIBLIOGRAPHY

 www.mcdonalds.com

 www.allbusiness.com

 Human Resource Management: Theory and Practice - John Bratton, Jeffrey

Gold

 Human Resource Management: Robert L. Mathis, John H. Jackson

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