The McDonalds Profile of Human Resource Management - Term Paper Example

The McDonald’s Profile of Human Resource Management Introduction Human Resource Management (HRM) has been ascribed an essential role in achieving thegoals of organizations. Its rise had important implications on the recognition of workers. The competencies of employees have been given more notice in recruitment and selection as well as in training and development (Van Marrewijk & Timmers, 2003). Its strategic position as a sounding board for top management and facilitator and change agent in the restructuring and transformation processes of the company is equally balanced with its role as an important partner for employees. “Thus, the HRM function positions itself in two ways: as the architect of new organizational structures and work systems, and as coach in management development processes and companion of employees in turnaround processes” (Van Marrewijk & Timmers, 2003, p.174). This paper will discuss the HRM practices at the world-renowned fast food chain, McDonald’s, being part of the hospitality industry. Ritzer (2011) coined the term “McDonaldization” to compare the fast-growing trend of some companies in their expansion efforts. Ritzer defines it as “the process by which the principles of the fast-food restaurant are coming to dominate more and more sectors of American society as well as the rest of the world.” (p. 1). Globalization has pushed so many companies to work at an elevated rate in order to be competitive with their contemporaries. Sometimes, its effect seems like the “robotization” of workers in an assembly line just so they comply with the requirements of organizational growth (Ritzer, 2011). This implies that most companies may have lost sight of the human side of human relations management. However, in the case of McDonald’s, they may have their own quirks in management, but overall, their steady growth as a hospitality organization show that they can overcome the challenges of HRM conflicts. Body 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. Boeller (2000) identified different models in excellence in Human Resource Management and identified McDonald’s as upholding the Modern-day Taylorism model which is described as a variant of the production model found in parts of the service sector. The production model ensures a continuity of production with a proper supply of human resources. This is the case at McDonald’s, where millions of people have claimed to have been employed by the company at some point in their life. Several models of HRM have been conceived. The most popular are the soft and hard models of HRM which offers a dichotomous approach to understanding how HRM works. Hard HRM also known as the Michigan Model (Fombrun et al., 1984) is characterized by the management’s strict adherence to company policies in order to achieve optimal productivity and profit. Legge (1995) calls it ‘utilitarian instrumentalism’. Radcliffe (2005) contends that is widely acknowledged as placing little emphasis on workers’ concerns. On the other hand, the soft HRM model also known as the Harvard Model, fully supports employees by looking for ways to unleash their resourcefulness in order to increase their effectiveness (Davidson, McPhail and Barry, 2010). Legge (1995) terms it ‘developmental humanism’. This model while still being concerned with the performance of the organization, advocates equal concern for its employees’ well-being (Radcliffe, 2005). McDonalds has more tendency to adopt the soft HRM approach. The Harvard Model (Beer, Spector, Lawrence, Mills & Walton, 1984)considers the interest of all stakeholders from the shareholders to the employees, to the unions as well as taking into account of the situational factors such as societal values that prevail and workplace conditions of employees. Consideration of these helps HRM to create policies for appropriate resource flows, reward systems, work systems and employee influence that will best satisfy employees within the firm (Radcliffe, 2005). Outcomes of commitment, competence, congruence and cost-effectiveness are expected when everything falls into place (Beer et al., 1984). Edgar (2003) believes that employers are likely to apply principles from both hard and soft models in their HRM practices. Since organizations all want to improve profitability, they take some principles from the Hard model. At the same time, organizations also tend to adopt the philosophy of developmental humanism so they take some principles from the soft approach to HRM (Guest, 1999). Another perspective is examined in terms of industrial and employment relations. The Unitarian approach reflects a common interest between employers and employees, therefore both share the same commitment in pursuing the common goals of the organization (Guest, 1987). This perspective includes effective communication and reward systems, however, it discourages the formation of unions (Worsfold, 1999). This is the perspective held by McDonalds. They do support their employees in their personal and professional growth. In effect, in ensuring the well-being of the employees, they are also refraining them from forming or joining unions. The pluralist perspective expect that conflicts between employers and employees are bound to ensue, so HRM has the crucial role of negotiating and resolving such conflicts in order to still meet the goals of the organization (Guest, 1987, Worsfold, 1999). These two views have served as the basis for studies on HR issues and reflect the development of theories on management and industrial relations. 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. McDonald’s recruits a workforce that may be considered marginal in the US - younger employees, foreigners, those from ethnic minorities, those with physical and/or learning disabilities, etc. This is in support of the company’s image of embracing diversity and provision of equal opportunities to everyone regardless of their background and abilities (Royle, 1999, 2002). This holds true not only for the US branches, but also for its European Market. 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). In Germany, the McDonalds’ 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. 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 a relenting workforce. The McDonald’s Food Corporation prides itself of having an effective motivation system that encourages their employees to improve their performance, resulting in the company’s productivity. 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. The employee motivation system is based on classic motivation theories that include Maslow’s and the Satisfaction theories. It abides by four simple principles as follows (Hunt, 2010) Elaboration of different systems of motivation per department Clear and attainable goals Goals change depending on the needs of the company and the skills of the employees Three components of the motivation system include financial encouragement, non financial encouragement, and social policy. These components are meant to meet the needs of the employees in the belief that fulfilment of employee needs will improve employee performance and the achievement of job satisfaction. The Benefit package of McDonald’s may be generous as compared to other companies. Apart from the basic benefits of competitive wages, free uniforms, free or discounted meals, flexible hours, medical insurance with prescription drug coverage, access to medical, vision and dental services, employees may enjoy insurance for short-term disability and life as well as for travel. They also enjoy paid holidays and vacation leaves as well as educational assistance not only for themselves but for their children (McDonalds.com). The employees who perform well are assured of the company sharing their goals for their families, their personal and professional development and the achievement of their work-life balance. Not only do they provide material motivational packages but also offer non-material motivation to show them how much they are appreciated as employees. 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 (McDonald’s.com). Promotion at work is given to deserving employees who have shown brilliance in their performance. One great example is Donald Thompson, who is an engineer by profession, but has risen from the ranks as president of McDonald’s. Thompson has proven his commitment to excellence as he implemented innovative strategies to increase profits for the company under his leadership. He has been open to learning a new field which is unfamiliar to him, and have come out of training with novel ideas to keep the company going (Hughes, 2007). McDonald’s company values include helping their employees be more aware and be engaged in helping not-for-profit organizations. They have a “Matching Gift Program” wherein the company matches employee gifts to qualified educational, civic, cultural, health and youth organizations with one dollar for every dollar the employee contributes, up to $5,000 a year (McDonald’s.com). This program is evidence that McDonald’s is a company with heart not only for their employees but for the betterment of all mankind. Being so blessed as a company, McDonald’s intend to share their blessings by motivating others to live quality lives. As evidence of their success in many aspects of the business, McDonald’s prides itself of numerous awards gained from various agencies. The following are just some of the documented awards of McDonald’s from the years 2007 to 2010 alone: The HR Excellence Awards gave McDonald’s the distinction of Best Workplace Diversity in recognition of its employment of 80,000 employees ranging from 16-85 years of age and coming from over 100 countries for the year 2010. Reflecting the acceptance of diversity as part and process of the McDonald’s culture, it is also a positive quality towards efforts in promoting multiculturalism in a globalized world. McDonald’s manifests its belief in the youth and is listed as a Top 100 Graduate Employer for the past 10 years. Being so, it is one of the first places graduating students eye for graduate job positions. McDonald’s is proudly the only company from the hospitality sector that made it to the list. Another award-giving body, the Business in the Community organisation, recognizes employers who show responsibility in developing the potential of their employees. McDonald’s was recognized for its “Total Talent Commitment” in the years 2008 and 2009. For the year 2010, a Big Tick award for the “Skills in the Workplace Category” has been received by McDonald’s. In addition, it has been shortlisted to be a finalist in the National Awards for Excellence. This award recognizes efforts in developing employees’ potential, bridging the perception gap and being a responsible and active member of the community. In relation to the previous award in unlocking employee potential, McDonald’s has also been given the Investors in People ‘Gold’ award in 2009. This award is an upgrade from previously received awards for being investors in People profile status. McDonald’s is the first big organisation in the UK to receive the profile status in Investors in People, and now, it has been recognized even more with a Gold status. It demonstrates continuous improvement especially by the people management section, who received top scores in the awards. 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. 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. All these motivation schemes can serve as evidences of McDonald’s efforts in implementing a positive working environment that promotes the growth and development of its people. 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. Like any other organization, McDonald’s cannot claim that its HRM practices are perfect. Although there are situations when management may manipulate the employees’ job design in order to comply with regulations and pursue profit-oriented goals, it still prioritizes the needs of the workers by giving them the appropriate motivation to improve their performance. Workers of the organization may have varied responses to its HRM practices. In some branches, turnover may be fast while in others, the employees stay on for a long time, garnering rewards of promotions and professional growth. In any case, McDonalds remain to be an icon in the fast food hospitality industry and they have several positive values, characteristics and practices that other organizations may emulate. References Beer, M., Spector, B., Lawrence, P., Quinn Mills, D. and Walton, R. (1984), Managing human assets, Free Press, New York, NY. Boella, M. J. (2000) Human resource management in the hospitality industry, Nelson Thomas Ltd. Brownell, J. (2008) Leading on land and sea: Competencies and context International Journal of Hospitality Management 27, 137–150 Chang, S., et al.,(2011) Promoting innovation in hospitality companies through human resource management practices. Int. J. Hospitality Management doi:10.1016/j.ijhm.2011.01.001 Davidson, M.C., McPhail, R., Barry, S. (2010) Hospitality HRM: past present and the future, Emerald Group Publishing Ltd. Edgar, F. (2003). Employee-Centred human resource management practices. New Zealand Journal of Industrial Relations, 28(3), 230. Fombrun, C. 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