Performance Evaluation - Essay Example

?Performance Evaluation Table of Contents Introduction 3 Company Background 4 Compensation Strategy 5 Job for the Position HR Manager 7 Performance Appraisal 8 Conclusion 9 References 10 Introduction It is duly observed by the today’s corporate gurus that “change” claims to be the only constant word. In this context, continuous performance evaluation plays a significant role for determining the merit or worth of a program or solution. The ultimate purpose of determining the value is to provide the information to the top level managers, for formulating action-oriented decisions that helps in enhancing performance of programs and organizations. As stated by Guerra-Lopez (2008), “every component driven by the evaluation must be aligned with the organizations’ expectations and objectives and the decisions that will have to be made as a result of the evaluation findings” (Guerra-Lopez, 2008). Evaluation of performance helps in comparing the result with expectation. It also assists in preparing action plans for improving the programs and solutions being analyzed, so that expected performance is achieved and sustained as well as organizational contributions and objectives can be realized. Job description and performance appraisal are the important parts of performance evaluation. Performance evaluation can be performed for any operating objectives of an organization but here employees’ performance evaluation with respect to their job and performance appraisal of McDonald’s will be conducted. This research study aims at the recognition of various issues related to the implementation of performance evaluation in the organization, i.e. McDonald’s such as job description as well as performance appraisal systems. Company Background McDonald’s is one of the most well-renowned multinational restaurant chain businesses operating globally. This huge phenomenal company was started in 1940 by Dick and Mac McDonald. Notably, the company can be recognized as a US based multinational fast food retailer. In present days, McDonald’s can be found in 117 countries globally. Till date, it enjoys the honor of being one of the very successful leaders of restaurant and fast food business (McDonald’s, 2011). Through the wide chain of around 32,737 restaurants scattered all around the world, the company tends to serve approximately 64 million customers on a daily basis. The company also employs a considerable number of around 1.7 million people in its chain of restaurants (McDonald’s Corporation, 2010). With these given virtues and with due consideration to the organizational objectives, performance evaluation can apparently be stated as a vital aspect in McDonald’s. McDonald's being in a service-oriented industry, the company requires providing significant consideration to the aspect of employee satisfaction and productivity with the purpose to attain superior customer satisfaction. Attaining sustainable growth through employee satisfaction and quality services to customers is among the most crucial objectives considered by the organization at present (McDonald’s Corporation, 2010). Therefore, it becomes quite essential for the organization to focus on the continuous performance evaluation of its employees and the organization as well so as to identify the continuous change in the customers’ preferences and the employee performances. Compensation Strategy In this competitive market, it has become quite challenging task for the employers to acquire and sustain productive, knowledgeable and talented manpower, especially in the service sector so as to gain sustainable growth. With due consideration to the fact that employees in terms of human resources are quite significant for organizational growth, training and evaluation have emerged to be the prime concern of the Human Resource Department (HRD). It is in this context that Human Resource Management (HRM) approaches are being provided with greater stress in order to enhance the contribution of employees in the overall organizational sustainability. One of the widely considered strategies can be recognized as the compensation strategy through which the employers intend to satisfy the individual employees with effective rewards in turn of their productivity (Sims, 2007). As commented by Upadhyay (2009), “The reward programs that have been the traditional domain of HR (e.g.; pay, benefits training) represent a significant and growing investment for an organization” (Upadhyay, 2009). Compensation is the payment of services provided by the employer to the employee, with respect to their performances. Implementation of several theories has been performed by organizations to attract and retain the quality work of the skilled employees. These theories include compensating differential theory which elaborates that skills and productivity demonstrated by employees determine their pay quite significantly. For instance, efficiency wage theory predicts that if wages are offered above the market standards, it intends to pursue the employees to work more efficiently and resists the will of employees for leaving. Again signaling theory explains that the kinds of behavior the employees expect are signaled by pay policies (Milkovich, 2008). McDonald's founder, Ray Kroc, once said, “Take good care of those who work for you and you will float to greatness on their achievements” (Bersin & Associates, 2007). Employees or people are the most essential resources of a company. The efficiency objectives of the compensation plan are to control labor costs, improve performance, and deliver satisfactory service and encourage quality work. Designing an equitable compensation plan is an intense task to be performed by top level management of any company. It requires in-depth knowledge and experience (Harvard Business Review, 2011). Source: (Milkovich & Et. Al, 2009) The philosophy adopted by McDonald’s is “Pay for Performance”. In other words, the better performance demands a higher scale of pay. The company’s pay techniques include base pay, incentive pay, long-term incentives, recognition program and company car programs among others (McDonald’s, 2011). The payment structure complies with all the policies of payment satisfying the legal procedure. The strategic objectives of pay model of McDonald’s are to add efficiency to the employee, enhance the quality of performance by reducing the cost and satisfying the customers. Fair payment is the fundamental aspect of pay system (McDonald’s, 2011). Job Description for the Position HR Manager Mader-Clark states that “job description is a clear and concise depiction of a job’s duties and the requirements” to be performed by the job holder (Mader-Clark, 2008). The job descriptions of the HR manager include various responsibilities which seeks great attention of the performer. Measuring, reporting and monitoring is counted amongst the vital performance of HR. Being an HR manager one needs to manage the unit expenditure and control it within the budget allotted. HR needs to be active in nature with very positive approach and efficient communication skill. HR manager needs to validate documents related to legal, salary statements and distribution policies among others. Another task of an HR is to develop and sustain a healthy relationship with government and non-government organizations, for better performance of the organization. From an overall point of view, it can be stated that HR managers act as a bridge between the top level management and the associates of the company relating the organizational objective with the personal interests of the employees that in turn enhances the profitability and growth prospects of the organization on the whole (Mader-Clark, 2008). Performance Appraisal McDonald’s has adopted various strategies for compensating their employees in return of their contribution to the organizational growth such as year-end bonuses, holiday timing and other similar reimbursements (McDonald’s, 2011). McDonald’s follows the traditional incentive payment system. Base salary is allotted to the employees’ in addition to monthly bonus. This is taken as the best proposal as it provides with an adequate distribution of compensation considering the managers of units. This practice of payment is implemented in the short-run with the intention of maximizing the individual utility and in the long-run for business progress. McDonald’s has taken many initiatives to retain the quality performance of employees. Employees are provided with medical and insurance facility, sum allotted is in accordance with their designation and experience. Conclusion McDonald’s, being a service-oriented company provides due consideration to the aspect of customer care strategies. In this context, the products and the services rendered by the company can be identified as the core concerns of the top management. It is due to this reason that human resource emerges to be one of the most crucial facets of the organization. This may be considered as one of the particular reasons for McDonald’s to implement adequate effort on motivating their employees. For instance, strategies with the purpose to compensate the employees can be recognized as fundamental aspects of motivation. Notably, the strategies implemented by McDonald’s are adding up to the productivity of the employees. Various convenient processes of payment are followed by McDonald’s for providing flexible way of compensation with respect to the convenience of their employees. References Bersin & Associates, (2007). McDonald’s Global Performance Practices. Talent Management Newsletter. Retrieved Online on September 10, 2011 from http://www.bersin.com/News/Newsletter/Archive/07_nov_tm.asp Guerra-Lopez, I. J., (2008). Performance Evaluation: Proven Approaches for the Program and Organizational Performance. John Wiley and Sons. Harvard Business Review, (2011). Case of Big Mac’s Pay Plans. Article Review. Retrieved Online on September 10, 2011 from http://hbr.org/1974/07/case-of-big-macs-pay-plans/ar/1 Mader-Clark, M., (2009). The Job Description Handbook. Nolo. McDonald’s Corporation, (2010). Annual Report 2010. About McDonalds. Retrieved Online on September 10, 2011 from http://www.aboutmcdonalds.com/etc/medialib/aboutMcDonalds/investor_relations3.Par.56096.File.dat/2010%20Annual%20Report%20(print).pdf McDonald’s, (2011). McDonald’s History. Our Company. Retrieved Online on September 10, 2011 from http://www.aboutmcdonalds.com/mcd/our_company/mcd_history.html Milkovich, G. T. & Et. Al., (2009). Compensation. Tata McGraw Hill. Milkovich, G. T., (2008). Compensation, 9E (Sie). Tata McGraw-Hill Education. Sims, R. R., (2007). Human Resource Management: Contemporary Issues, Challenges, And Opportunities. IAP. Upadhyay, S. S., (2009). Compensation Management: Rewarding Performance. Global India Publication. Read More