Internal and External Pressures Facing the McDonalds Corporation - Case Study Example

Running Head: STRATEGIC HUMAN RESOURCE MANAGEMENT Strategic Human Resource Management Name Course Institution Date Table of Contents Running Head: STRATEGIC HUMAN RESOURCE MANAGEMENT 1 Table of Contents 2 Introduction 3 Internal and External Pressures 4 Employee Training and Development 6 Evaluation and Auditing of the impact of Employee Training 7 Performance management, development and reward 8 Development of a Successful Retention Strategy 9 Conclusion 10 Recommendations 11 References 12 Strategic Human Resource Management Executive Summary Over the years, the McDonalds Corporation has experienced tremendous growth and success. Much of the Corporation’s success can be linked to its effective management practises and its outstanding services (Love, 2008). However, the Corporation faces a number of challenges revolving around both the internal and external environment of the organization For instance, since 2002 the Corporation has experienced a series of embarrassments with negative media coverage and law suits, due to its provision of unhealthy foods stuff that cause obesity as a result, the Corporation experienced 15 % reduction in its market stocks causing it to become the third biggest loser in the “Dow Jones Industrial average”. Moreover, employees working in McDonald's are often identified as the lowest class of the society with little to hope for in terms of job satisfaction and personal growth. As a result the company has been experiencing high labour turnover (Asuka, 2007). In order to address these concerns the company needs to develop an elaborate training and development programme aimed at addressing the needs of its employees and foster their growth and development. In addition regular performance appraisal needs to be carried out to evaluate the success of the training program in addressing these needs. Finally, the company also needs to invest in a successful retention strategy that will trim down the high labour turnover the company has been experiencing. Introduction McDonalds Corporation is the world’s largest fast food restaurant chain with over 30 000 outlets in Australia and other parts of the world. The company has a work force constituting of about 1.5 million employees and serves approximately 58 million customers daily around the world (McDonalds.com). The individual restaurants are managed differently with some being directly run by the corporation while others are affiliates or a franchisee. This mode of operation creates revenue for the company in two ways which include sales made by the restaurants run by the corporation and payment of loyalties, rent and other fees from the affiliates and franchisee. The food chain mainly deals with the sale of fast foods such as hamburgers, French fries, cheeseburgers, chicken products desserts, soft drinks and shakes. The company has also introduced other healthier alternatives such as salads, fruits and wraps in response to a negative consumer perception that their products did not meet certain health standards and growing obesity among some western countries (Love, 2008). This report aims at identifying some of the internal and external pressures facing the McDonald’s Corporation. Subsequently, this report will depict ways in which these pressures can be addressed using effective strategic human resource management (SHRM) practices and human resource management (HRM) concepts. Some of the SHRM practises and HRM concepts that will be discussed in this report include; Employee training and development, Evaluation and auditing of the impact of employee training, Performance management, development and reward and Successful retention strategies. Internal and External Pressures Since 2002, the Corporation has experienced a number of challenges revolving around negative media coverage and law suits, mainly because of its provision of unhealthy foods stuff that cause obesity as a result, the Corporation experienced 15 % reduction in its stocks making it the third biggest loser in the Dow Jones Industrial average. As a result of the increasing number of immigrants, the variety of tastes is also increasing and the exotic cuisines from Asia are attracting consumer preferences rather than McDonald. McDonald’s also faces competition from other food chains such as Burgerking, KFC and Subway restaurants (Love, 2008). In addition, the entitlement of jobs in McDonald’s is often referred to as ‘McJobs’ in the American society due to low-pay and labour-intensiveness. Employees working at McDonald's chains are usually regarded as the lowest working class in the society. According to the comments of Justice Rodger Bell during the 1997 trial between McDonald's and a former employee, working in McDonald’s is characterized by lengthy shifts, late closes ,unreliable breaks due to busy hours, lack of third-party representation in cases of grievance and autocratic management. This has in turn created a bad image for the organization. Over time, McDonald's leaders have determined to change the image the corporation by incorporating strategic human resource practices (Asuka, 2007). In order for the organization to address the challenges mentioned above it needs to embrace and apply strategic human resource management practices that are key to addressing these issues. Strategic Human Resource management is a proactive management process of linking HRM practices to the strategic objectives and goals of the organizations so as to promote performance and increase competitive advantage of the organization (Armstrong, 2000). In order for McDonalds to achieve this goal, it will need to initiate training programs that focus on the enhancement of the employees’ leadership potential, resilience, social confidence, communication and collaborative skills and carrying a thorough regular audit and evaluation in to the impact of the strategic HRM practices. In addition, the company should to develop a successful retention strategy and enhance performance management, development and reward. Employee Training and Development Although McDonalds is a successful fast food giant it is continuously facing a number of challenges originating from both the internal and external environments of the organization. In order to address these challenges the organization needs to embrace a number of strategic Human resources management practices that will drive guide it through the problem solving process. Key among these practices is the formulation and execution of training programs that are aimed at enhancing the employee’s leadership skills, resilience, communication, social confidence and collaboration. Employee training and development is vital for an organization because it not only provides extra skills essential for increasing efficiency, productivity, nurturing innovation and creativity but also creates an opportunity for a high job satisfaction (Schneier, 1994). The benefits of training programs are twofold; first and foremost, it improves employee performance which will enhance the achievement of the organizational goals and secondly, it will also enhance the personal development of the employee and therefore boost their morale which will lead to a higher job satisfaction. The training programs should be need-based and should aim at empowering the employee to be able to make informed and timely decisions that are beneficial to both the organization and its clients (Schneier, 1994). It should first focus on giving the personnel a thorough understanding of the organization’s strategy then based on these strategies equip the employees with crucial knowledge and technical skills that will expedite the achievement of these goals and strategies It is worth mentioning that an organization cannot achieve positive grow if the needs of the employees are not keenly looked at in line with the organizations strategic plans (Sims, 2002). In McDonalds restaurants chains around the world, many employees feel trapped in lowly paying jobs which do not promise better growth prospects in future. To change the perspective the management will need to address these concerns through training and development programmes which will give the personnel an opportunity for promotions and growth and development. Through training the issue of stagnation will be effectively addressed since with the new acquired skills one can rise from one rank to another boosting their morale and vigour in duty performance. There is no better way to achieve a business goal than with a motivated workforce that is ready and fired up to deliver the results. In addition, such a workforce builds a better public image for the organization as compared to any other method. Therefore McDonalds needs to look keenly into personnel needs develop an elaborate training programme that can address these needs in a manner that will suit the organization, the employees and also enhance better services for its clients(Sims, 2002). Evaluation and Auditing of the impact of Employee Training With a training programme in place, the management of McDonalds should now embark on carrying out a regular audit and evaluation of the impact of their training programme it has initiated in order to ascertain whether it is addressing the needs it was tailored to meet. Such an approached will ensure that the organization remains on track in realizing its goals and objectives. A step by step evaluation is crucial in gauging the outcome of the training programme. For example, how do the employees respond to the training, do they feel it addresses their needs? Does it offer them better future growth prospects? On the other hand, does the management perceive any tangible benefits which they can directly associate with the training program? What is the response from the customers? Such questions will assist the management to do a proper evaluation of the gains made and also make the necessary amendments in order to address other emerging needs. In addition, regularly audits will facilitate the enhancement of employee skills in the light of new technological advancements which is crucial in achieving efficiency and speedy implementation of the business strategy (Berman et al, 2010). However, since McDonalds is a massive organization with business ventures spread out in 118 countries it would be necessary to develop a common questionnaire that can be used to assess the progress made in all outlets in order to ensure a balanced approach. Furthermore, to achieve more concrete results independent parties can be used to assess the behaviour and the attitudes of the employees to ascertain whether the written feedback tallies with their mood and behaviour at the workplace (Sims, 2002). Performance management, development and reward Another important principle which the management of McDonalds needs to facilitate is the art performance management, development and reward. This involves the process of facilitating a working environment that stimulates the personnel to give out their best job performance in order for the goals and objectives of the business are realized in the most effective and efficient way (Bohlander & Snell, 2010). The management needs to critically analysis the performance of the individual employees against their mode of behavior and physical movements in order to gauge the results realized by the training and development programme. From this analysis, it will be possible to evaluate job performance, how behavioural change is affecting the achievement of the organization’s goals and objectives establish some standards and implement an action plan aimed at addressing areas of deficiency. The action plan should be implemented in a manner that will boost employee morale and not be viewed to only aim at maximizing the output of the employee without proper and adequate compensation. If the appraisal process gives positive results then it will be incumbent upon the management to consider giving motivational incentives inform of promotions, salary increment or bonuses. Such an initiative is bound to create a further positive stimulation in the eventual realization of organizational goals. In addition, the employees will acquire a sense of belonging since they feel their contribution to the organization is appreciated. Furthermore, this approach will work to reduce the employee turnover rate in line with the changed positive perception by the personnel (Robert & Jackson, 2008). Development of a Successful Retention Strategy The development of a successful retention strategy is also paramount to the success of the organization. A successful retention strategy should first aim at indentifying the needs and feelings of the employees on a variety of matters such as what changes they would like to see in the organization, how they would like to perform their duties and so on. It should be keen on addressing the needs of the employees in order to ensure their job satisfaction. In order to ensure the success of the strategy, the management should conduct regular needs assessments for their employees and foster a culture of free interaction between the management and its employees in order for effective communication to take root. Communication is vital for the achievement of a successful retention strategy since a failed communication link between the management and its workforce will lead to a disoriented workforce. This is because there will be no channel or avenue to articulate their needs and feelings to the management. Communication between the members of the workforce and the top management of the company is critical to realizing this goal. In addition, the management should endeavour to make the working environment likable for all employees. The environment should be conducive enough to induce a genuine desire for the ordinary worker to long coming back to work the following day. It is only with such an environment that the organization can comfortably rest assured that the most valuable asset it has (that is:its employees) is vibrant and goal oriented in the performance of their duties and responsibilities (Pattanayak, 2005). Conclusion McDonalds should always be keen to invest in any initiative that will foster their employees’ morale because such an initiative will always work towards a better public image and create a vibrant workforce that is ready to take the organization to the next level. It should desist from drawing the maximum output from its employees while giving back the minimal returns. In order to realize a vibrant human resource asset, the company should invest thoroughly in employee training and development programmes that aim to boost the skills of the workforce while at the same time creating an opportunity for the employees to advance to new horizons within the same establishment and also enhance their personal well being. The training programme should also be need based and tailored to provide each employee with the ability to make informed and timely decisions that are beneficial to all stakeholders. In addition to this, the management should also make a keen following in order to establish the impact of the training in addressing the needs it was aimed for. If the programme has not achieved the required results, a redesign of the whole program will be necessary. The performance appraisal should be carried on a regular basis in order to ascertain whether the behavioural change is in line with the desired output. The key here is to ensure the employee is happy and enjoys full job satisfaction in order for him/her to contribute effectively to the realization of the organizational goals and objectives. Finally, the management of McDonalds should device an elaborate retention strategy in order to reduce the employee turnover rate. Such a strategy should first aim at establishing the needs and feelings of the employees and based on this information initiate a programme to address these concerns to the satisfaction of the employees. The management should understand that the only true remedy to high employee turnover is a satisfied workforce (Robert & Jackson, 2008). Recommendations The company should conduct a thorough needs assessment in order to ascertain the individual needs and concerns of its employees. Based on the information gathered from the needs assessment programme, the human resources department should come up with an elaborate tailor made training programme aimed at addressing these needs. The company should regularly carryout performance appraisal in order to establish whether the training program has effectively achieved it intended goal. Key among the goals to be achieved should be job satisfaction. The management should also create avenues for employee advancement through promotion in order to guarantee growth and reduce employee turnover. The company should enhance dialogue between its management and the rest of the employees in order to create a sense of belonging. References Armstrong, M. (2000). Strategic human resource management: a guide to action. UK: Kogan Page Publishers. Asuka, J. (2007). McDonald's Corporation Human Resources Issues. Retrieved on March 8, 2011 from Read More