McDonalds Global Strategic of Human Resource Management - Essay Example

?Hiring Marginalized Workers and Union-busting: Two of the Challenges in European McDonald’s Restaurants Introduction McDonald’s is known for the highest quality in food, service, cleanliness and value that Quality, Service, Cleanliness and Value (Q.S.C. & V.) became the company motto since 1957. In 1961, Ray Kroc bought all rights to the McDonald’s concept from the McDonald brothers (mcspotlight.org). He also opened the Hamburger University in Elk Grove, near Chicago where people intending to be in the business were given high quality training and development. Since then, McDonald’s kept growing in terms of business and innovative products and concepts that attracted the international market to acquire franchise stores in their countries. At McDonald’s, learning is highly encouraged. From the setting up of Hamburger University to educate people in the food business, to welcoming students to work part time while offering them a suitable schedule to still accommodate their studies, the company has established its value for learning. Within each store, much learning and development ensue. Employees’ skills and potentials are maximized with effective motivational strategies. Aside from contributing to the improvement of employees, it also redounds to beneficial outcomes for the company. To management, their human resources are the company’s greatest wealth and are worth investing on. They see employees as the primary source of progress in terms of quality and productivity. Employee development takes on a learning orientation throughout the McDonald’s system. This shows the company’s commitment to empowering their people towards better performance in their work, thereby impacting organizational efficiency. The awards reaped by the company throughout the years prove that McDonald’s is one company committed not only to the highest standards of excellence in the food service industry but also to being a great employer that motivates its employees to strive for their best performance. Employee recognition is one thing McDonald’s believe in. Their recognition programs are designed to reward and recognize worthy employees who exhibit above average performance. The President’s Award is given to the top 1% of individual performers worldwide in the corporate division and region offices. The Circle of Excellence award is bestowed upon top teams who contribute their efforts in advancing the company’s vision (McDonald’s.com) With the purpose of retaining their high-performing employees, McDonald’s has also devised ways to keep them such as helping them invest in their futures. Employees have access to financial management services, profit shares in the company as well as long-term incentives. These benefits are granted to key employees who have exhibited sustained quality performance and have impacted long-term value creation in the company (McDonald’s.com). An employee of the month is voted each month and then, each quarter. This motivates the employees to strive hard to be a candidate. The winner gets vouchers as rewards and becomes eligible as candidates towards Employee of the quarter, and rewards are increased as the employee goes up the hierarchy of the award. Another motivational scheme for employee development is rewarding employees for their loyalty to the company in the longevity of their employment. Employees who stay at McDonalds from 5 years are given monetary rewards every 5 years, and this increases in value every time. The foregoing is what is publicized as McDonald’s profile as an employer. However, a different case seems to be recognized in its branches in Europe. Although it has exerted much effort in preventing the formation of unions amongst their employees, discontent in some still manage to seep through (Royle, 2002). McDonald’s in Europe face a greater challenge in terms of its employment of culturally diverse workers with varying ages and qualifications (Royle, 1999). This paper discusses such issues on how the company has dealt with such challenges in its European counterparts. Body Royle’s articles (1999, 2002) have dealt with labour issues in the European market. First is the recruitment of a workforce which may be considered marginalized in the US – younger employees, foreigners, those from ethnic minorities, those with physical and/or learning disabilities, etc. In most cases the employment of such groups become threats to the efficiency and reputation of the workforce. However, at McDonald’s, a different perspective justifies the decision to recruit, employ and retain these employees. In support of its good image of embracing diversity, the employment of a variety of workforce characteristics can be seen as giving equal opportunities to everyone regardless of their background and abilities. In the face of unemployment crises like the case in Germany, a job at McDonald’s is often an open option whether for a person seeking his first job or an experienced professional whose qualifications are not taking him anywhere in light of unemployment issues. With a younger group of employees, like those in the UK branches, there are several students who need to work part time to support their studies and McDonald’s accepts them with open arms along with several opportunities for growth within the company. An advantage for McDonald’s is shelling out lower labor costs due to the limited qualifications required by the job. Royle (1999) contends that McDonald’s takes advantage of ‘weak’ and marginalized segments of the labour maket because they are likely to be acquiescent to managerial prerogative. For these workers, lack of other opportunities like those offered by McDonald’s gives them no choice but to stay in their jobs and just follow the rules and regulations so as not to lose their positions to other candidates like them who are just waiting for a break like theirs. In UK, the workforce is mostly made up of students, second income earners who want flexible hours and very young employees aged 20 and under who work part-time. These employees were attracted to jobs at McDonald’s because of the flexible hours offered, the fast pace of the work and the emphasis of “fun” because of the feature that they get to work with a lot of people their own age. With regards to full-time workers who have stayed on with the company for a longer period of time, there are those who have high qualifications and could actually be employed in a more demanding job elsewhere but they seem to be “coasting” until they get a better job. Next, there are those who have not done well academically and remain in McDonald’s for lack of other alternatives. Some of these full-time employees may be seeking a career to build with the company (Royle, 1999). On the other hand, the German workforce has an older group which is dominated by foreign guest workers and economic migrants. These individuals seem to enjoy the “family” atmosphere they experience in the company and their job does not really require them specified qualifications or language abilities. Being so, these employees stay on longer than their younger and more restless counterparts (Royle, 1999). Other employees who have not been successful in other careers find second chances in a McDonald’s job. As long as the company continues to expand, and it seems to be very likely in many years to come, such opportunities are always available. Royle (1999) observes that regardless of differences in market regulation for multinational enterprises (MNE), McDonald’s is able to take advantage of such weak segments of the labour market. In both German and UK settings, the workforce is unlikely to go against management procedures because their workforce characteristics show that they badly need their jobs and will not put it on the line by complaining about irregularities in labour practices, if ever. Another reason is, that younger workers have little or no work experience to compare working conditions with, and in any case, they do not seem to have any stable plans to continue on with their employment with the company for the long run. So it seems that the situation is a win-win one for both the McDonald’s management and their “acquiescent” workforce as they get what they need from each other. McDonald’s manages the employment relationship through its organizational rules and procedures with a paternalistic management style and an relenting workforce. Another issue that Royle tackles in his other article (2002) is McDonald’s success at quashing unions. Throughout its history as a corporation, there have been attempts of workers to unionize to fight against certain unfavorable conditions in employment and management has been swift to circumvent such moves and put up a positive image to somehow erase the complaints that have marred its good name as an employer, and go back to the status quo. In addition, they have created strategies to discourage the formation of unions such as the distribution of ‘just vote no’ batches and ‘no union’ tee-shirts and contesting the validity of the election for the union. McDonald’s has been successful in discouraging unionization in its American and Canadian restaurants and was optimistic of the same conditions when they entered Europe. However, it was a challenge maintaining the same situation in Europe due to its world of difference in employment conditions there. McDonald’s had to deal not only with national-level regulation and national trade unions, but its interaction with European-level regulation as well (Royle, 2002). The company upholds McParticipation as an approach to worker participation akin to employee involvement (Marchington, 1995). This strategy to make workers feel that they are part of the operations of the company includes newsletters, suggestion schemes, team briefings and RAP or Real Approach to Problems sessions. In theory, workers are able to express their views and grievances in such sessions but in practice, their complaints are rarely acted upon and many workers are not invited to attend such sessions especially if they are suspected to have union formation/membership tendencies. Although McParticipation was designed to project concern for employees’ views and opinions regarding the operations of the company, it is at best a management-dominated, paternalistic consultation regime (Royle, 2002). When McDonalds’ ventured into Europe, it was found that most countries there do have statutory ways to ensure workers’ rights and sometimes, they are even consulted regarding decisions about management. Workers are given rights to information and consultation over management decisions which are bound to affect them. That is why it is essential for works councils or union representatives to be present in every restaurant, so that they can monitor if collective agreements between management and workers are implemented. This may prove as burdensome for the McDonald’s management especially since there have been times when collective agreements were not adhered to especially in terms of incorrect pay levels, inadequate notice of shifts, incorrect calculation of holiday pay, cleaning of uniforms and a range of health and safety issues (Royle, 2002). Since McDonald’s have had some issues with worker unions in America and Canada and have succeeded in remaining union-free, it now faced another challenge with European insistence of work councils and union representatives. Works councils seem to be a bump that needs to be removed or smoothened out in the McDonald’s management and they take all efforts to get rid of them. Management is able to manipulate their employment conditions by demoting work councils in their employ to a lower position, change their shifts or even buy them out just so they are silenced of any labor complaints. The management has crafted some schemes in order to reduce the number of works councils to monitor its operations. It has done so with circumventing ownership of some branches as franchises and some as operating directly under McDonalds’ corporation and others under other holding companies. Its handbook for German restaurant managers include a specific section on “Practical help in dealing with works councils’ instructing management to discourage employee’s attempts to establish works councils because it will pose as a serious problem and failure of management. It was more difficult in France. The French Democratic Confederation of Labour (CFDT) is known to be more protective of workers’ rights and more powerful in controlling multinational enterprises in their country. In 1994, CFDT accused and charged 10 out of 12 managers of McDonalds’ for impending union rights and hindering the election of a works council. Realizing that they were up against something bigger, McDonald’s relented in 1995 when a new HRM manager was appointed who was out to save the reputation of the company for being anti-union. This new manager established better ties with CFDT. However, McDonalds was wily enough to agree to CFDT conditions for works councils and workers’ unions in company owned-restaurants because 90 percent of their restaurants were operated as franchises or joint-ventures and therefore, out of the gamut of the CFDT. Conclusion The enormous magnitude of the McDonald’s company has its share of successes and failures which the company deals with and somehow eradicates or at least covers up. Like in any business, it highlights the positives such as the abundance of awards it reaps for its supposed high quality of products and services as well as its multi-awarded employment nature. Simultaneously, it anticipates any negative outcomes from external forces that may threaten the solid management systems they have put in place and established back up plans to manage the probable problem. The practice of hiring weak and marginalized candidates for employment may be seen by other companies as a mistake and an unwise move that risks organizational efficiency and success, however, McDonald’s may showcase it as their share in providing equal opportunities to everyone no matter who they are and where they came from. Being so, they are projected to be a haven for people seeking employment from a company that would meet their needs. Of course, it cannot be denied that hiring less than qualified employees significantly reduces the company’s expense for labour costs and gives them a leverage in making the employees acquiesce to its management policies and practices. Another challenge for McDonald’s is the adherence to policies for MNC’s in Europe especially in the area of employee interest representation. This is because the corporate culture established in McDonald’s does not allow for co-determinaiton or co-operative decision making because it believes decisions have already been thoroughly thought about and made by management. Willmott (1993) defends that a strong corporate culture like McDonald’s ‘exclude and eliminate’ values which are not part of its system, one of which is the acceptance of unions. For them, unions are seen as unwelcome interference of good management practice as well as a factor that may add to the burden of labour costs. Not only have McDonald’s been successful in recruiting an ‘acquiescent’ workforce in its European restaurants and in finding ways around the requirement of works councils and union representatives, but it has also found advantages in delegating their restaurants to a large proportion of franchise operators. It imposes tight, standardized control over its franchises but when appropriate, it is able to distance itself from the employment relations practices of individual franchise operators if such fails to comply with collective agreements or interferes with the establishment of works councils and union delegates (Royle, 2002). Although McDonald’s have had many challenges in its history, the management has been efficient enough to deal with them and to maintain its overall good reputation that has been widely publicized. No doubt more there is no end to corporate bumps and conflicts as it continues to grow even bigger, but with the way McDonald’s have handled its major setbacks, it has gained more confidence in reaping more success and in overcoming more challenges in the future. References Marchington, M. (1995), ‘Involvement and Participation’, in J. Storey (ed.), Human Resource Management:A Critical Text (London, Routledge) McDonalds.com (2010) Benefits. Retrieved on March 10, 2011 from http://www.mcdonalds.com/us/en/careers/benefits.html McSpotlight.org (2010), A brief history of McDonald’s. Retrieved on March 10, 2011 from http://www.mcspotlight.org/company/company_history.html Royle, Tony (1999) Recruiting the Acquiescent Workforce: A Comparative Analysis of McDonalds’ in Germany and the UK. Employee Relations 21 (6): 540 – 555. Royle, Tony (2002): Just Vote No! Union-busting in the European fast-food industry: the case of McDonald's. Industrial Relations Journal 33 (3): 262- 278. Willmott H. (1993), ‘Strength is Ignorance; Slavery is Freedom: Managing Culture in Modern Organisations’, Journal of Management Studies, 30, 515–552. Read More