Foundations of Human Resources Management in McDonalds - Case Study Example

Foundations of human resources management-McDonald’s Name of the Student: Name of the Instructor: Name of the course: Code of the course: Submission date: Foundations of human resources management-McDonald’s Introduction The concept of HRM can basically be perceived as a strategic approach to managing the relations in employment which emphasizes that leveraging the capabilities of the people is integral in the efforts to achieve competitive advantage (Bratton & Gold, 2003, p. 6). Extensive researches which have been conducted in diverse scholars and practitioners have for long fortified the fact that human resource practices have massive impacts on the outcomes of various firms. This is founded on their integral role in determining and molding the attitude and behaviors of the employees, not forgetting their influence on both the short and the long-term performance of the institution. This fact is also supported by different scholars, for instance, Ostroff and Bowen (2000) who revealed that human resource practices are vital in shaping the attitude of the workforce through molding the perceptions of the employees about the nature of the organization, what it is like and also informing their expectations of the magnitude and depth of their future relationship with the organization. The global crisis predicted for 2013 poses extensive impacts on the human resource practices of various organizations around the globe. The organization which is chosen for this analysis is McDonald’s. Therefore, this paper will explore the impacts of the global crisis predicted for 2013 in consideration of the actual/potential HRM problems at McDonald’s. However, it is imperative to first gain a brief overview of McDonald’s which will offer a comprehensive insight into the potential HRM problems which confronts this organization amid the global crisis predicted for 2013. McDonald’s: Brief overview The company which is headquartered in the US instigated its operations in 1940 as a barbecue restaurant. McDonald’s is currently the largest chain of hamburger fast food restaurant credited of serving an estimated number of 68 million consumers daily in 119 countries where it has established its operations. This company has a brand mission of being the favorite place and way to eat and drink for its consumers. In this regard, it has founded and aligned its worldwide operations around a global strategy referred to as plan to win which is anchored on an exceptional consumer experience- people, price, product and promotion (McDonald’s Website, 2013, p. 1). Over the years, McDonald’s have made profound efforts to establish and develop robust HRM practices which have for a long time underpinned its success. This is best epitomized by the training and development programs instituted in this organization which helps the employees to keep on learning through its educational assistance program (McDonald’s Website, 2013, p. 1). The primary rationale of choosing this organization is founded on the fact that being in the food industry, the HRM function among other operations of McDonald’s are bound to be affected by the global crisis predicted for 2013. This crisis which originated in the extreme weather conditions in the summer of 2012 which saw almost 80% of the continental US experience drought conditions, a phenomenon which was replicated in Australia and Russia. With other countries like China, Brazil, Egypt and Pakistan being confronted by similar predicaments of escalating prices of food materials, this is bound to have a detrimental impact of causing food cost inflations around the world. This phenomenon has already been evident in China, a country which is vulnerable to food cost inflation. In just one month of July 2011, the cost of living in China leapfrogged 6.5% as a result of the escalating food costs. This phenomenon is bound to be replicated in diverse regions around the world and is bound to extensively affect the operations of the companies in the food industry which will not spare the HRM functions of these companies (Frum, 2012, p. 1). This realities of this probable global crisis in 2013 has informed the selection of McDonald’s, being a major player in the global food industry and vulnerable to the impacts of this rooming global crisis. Probable HRM issues There are several HRM issues which are bound to confront McDonald’s as a company amid this global crisis predicted for 2013. It is imperative to note at this juncture that two primary HRM theories namely employee training and development theory as well as strategic HRM theory will be used in this analysis. Employee training and development theory Basically, the training and development theory implies to the concept of elevating the level of skills and knowledge among the employees through development initiatives and group-based training. This theory of HRM derives its origin from the expertise-based industries, for instance, manufacturing where the productivity of the employees has a direct relationship with the level of the skills that these employees possess. As earlier noted, McDonald’s has a comprehensive training and education program which even goes to the extent of enrolling an outstanding student-employee applicant from each state and district of Columbia to be a recipient of a $2,500 scholarship. This is aimed at both enhancing the skills and knowledge of the employee-student based on the cognition of the fact that the McDonald’s student-employees who achieve outstanding excellence in their studies proceed to serve their particular communities as well as going an extra mile in the delivery of outstanding services to the consumers (McDonald’s Website, 2013, p. 1). This benefit is supported by Jehanzeb and Bashir (2013, p. 63) who cited that training impacts on the behavior of the employees as well as their workings skills and subsequently results in enhanced employee performance and more constructive changes which serves to elevate the performance of the employees. Despite this being a robust HRM initiative, this is confronted by potential HRM problems amid the predicted global crisis in 2013. This is whereby this crisis most characterized by increased costs of food materials is bound to elevate the operating costs of this company and subsequently limit the amount of funds available for supporting the scholarship programs at McDonald’s. On the other hand, there will be an increased need for in-job training for practically all the employees in this company aimed at equipping them with adequate skills and knowledge for them to conveniently confront the challenges in pricing and consumer demand occasioned by this global crisis predicted for 2013. This is bound to inflate the financial burden at McDonald’s which is channeled towards training and development of these employees. This is bound to create a critical HRM problem in the company in case of lack of substantial funds to support this initiative. Strategic human resource management theory This is perhaps the most widely used principle HRM theory. The strategic human resource management theory (or SHRM) relates the power and resources of the employees with the strategic goals and targets of the organization. In a nutshell, this theory is underpinned on the assertion that the performance of any organization is primarily dependent upon several fundamental factors like dedication, motivation, productivity and commitment. In this case, the achievement of any organizational target or goal is usually through the efficient combination of all these factors. At McDonald’s there are extensive mechanisms instituted to ensure elevated commitment and motivation of the employees, for instance, robust reward and recognition programs. Nonetheless, it has been revealed that the managers at McDonald’s restaurants are disciplined to accept tough working schedules. In this case, there is a tendency towards long working hours and young managers in this firm are constantly persuaded to accept the long unpaid working hours as a norm but also to derive satisfaction from surviving through these uncompromising work routines. The massive laxity in motivating the employees among most contemporary organizations is revealed by Irshad and Afridi (2011, p. 318) who determined that it is a challenge among different HR managers in diverse organizations to identify the developmental strategies in their organizations which projects increased enthusiasm among the employees in terms of commitment towards the values and vision to motivate the employees and assist the organizations in gaining and sustaining their competitive advantage. At McDonald’s, this situation is bound to worsen with the rooming global crisis predicted for 2013 whereby the increased pressure to perform on the employees is bound to leave them less motivated and committed towards achieving the overall goals of this company. This is bound to have diabolical implications on the performance of this company both in the short and long-terms. Additionally, it is worth noting that the predicted global crisis will significantly pose negative effect on the amount of finances committed towards certain tenets which inform the commitment, motivation and eventual productivity of the employees, for instance, rewards. This is bound to affect the level of motivation, productivity and commitment of the employees which will detrimentally impact on the overall performance of this organization. Moreover, this will negatively affect other HRM functions of this company, for instance, employee retention which is core to the sustained competitive advantage of McDonald’s. Subsequently, the predicted failure to achieve these tenets as envisions in the strategic HRM theory as a result of extensive influence of the predicted global crisis in 2013 will present major HRM issues at McDonald’s both at the present and in the future. Recommended HRM strategies/practices Against the preceding backdrop, there are several HRM strategies/practices which can be implemented by McDonald’s aimed at surmounting these eminent issues occasioned by the global crisis predicted for 2013. Some of the recommended HRM strategies/practices are explored in the subsequent section. Firstly, McDonald’s ought to re-strategize on its mechanisms aimed at fostering the motivation, commitment and productivity of the employees amid the rooming crisis. This will be integral in determining the performance of this organization during and even after this crisis. One of the strategies is supervisor support which is directly related to the relationship between the managers and the employees which plays a key role in the motivating the employees and cultivating their commitment. This recommendation is underpinned by the finding by Irshad and Afridi (2011, p. 320) that in an organization, employees often respond to admiration, motivation as well as support and encouragement no matter the environment. Implementing this initiative does not necessitate any financial backing and thus will be integral in surmounting some of the prospective HRM problems outlined in the preceding section. The second recommendation is that McDonald’s ought to increasingly focus its training and development programs towards affording the employees with prerequisite skills and knowledge necessary in surmounting the prospective challenges emanating from the predicted crisis. This includes basic skills like ideal consumer service practices among others. The elevation of these basic competencies whereby the staff will become more competent in discharging their duties through learning both the soft and technical skills which are required in their jobs will be key in ensuring that this company retains its market share amid this crisis. In addition, the training programs have been integral in fostering satisfaction among the employees and culminated to greater commitment and motivation among them as well as reduced turnover rates. The last recommendation is that McDonald’s ought to increasingly minimize some of the aspects of its HRM strategies which are detrimental in negatively impacting on the morale of the employees. This includes long unpaid working hours for the young managers which have negative impacts on their level of motivation. This can be solved through ideal HRM practices like job rotation and remunerating overtime working hours among these employees. Conclusion The preceding analysis has evidenced that HRM practices are critical in terms of their massive impacts on the outcomes of various firms. Additionally, it has revealed that McDonald’s is confronted by diverse HRM problems as a result of the global crisis predicted for 2013. This paper has also provided a brief overview of McDonald’s as well as a rationale for selecting this company to be the case study in this analysis. Moreover, it has used to principle theories of HRM namely employee training and development theory and strategic HRM theory to explore some of the potential internal HRM problems which might be caused by the global crisis predicted for 2013. The last part of this paper has forwarded diverse recommendations in terms of strategies/practices which can be implemented by McDonald’s aimed at surmounting these eminent issues occasioned by the global crisis predicted for 2013. References Bratton, J., and Gold, J., 2003, Human Resource Management: Theory and Practice, 3rd edn, Palgrave Macmillan, Hampshire. Frum, D. 2012, ‘Why 2013 will be a year of crisis’, retrieved 15th May, 2013, < http://edition.cnn.com/2012/09/03/opinion/frum-food-price-crisis>. Irshad, M. & Afridi, F., 2011, ‘Factors affecting employees retention: Evidence from literature. Abasyn Journal of Social Sciences, Vol.4, No.2, pp. 307-339. Jehanzeb, K. & Bashir, NA., 2013, ‘Training and Development Program and its Benefits to Employee and Organization: A Conceptual Study’, European Journal of Business and Management, Vol. 5, No. 2, pp. 243-252. McDonald’s Website, 2013, retrieved 15th May, 2013, < http://www.aboutmcdonalds.com> Ostroff, C., & Bowen, DE., 2000, ‘Moving HR to a higher level: Human resource practices and organizational effectiveness. In Multilevel theory, research, and methods in organizations, eds, K. J. Klein & S. W. J. Kozlowski, San Francisco, pp. 211–266. Read More