Management System for Employees at McDonald's - Case Study Example

Executive Summary This report evaluates the reward management system for employees at McDonalds by looking into the present reward management system, the fit between the present reward management system and the strategies which the organization has pursued and proposes a reward management system for McDonalds which will help to improve the motivation level of employees and will act as a point through which better results can be achieved. It is seen that the current method is inconsistent and lacks clarity along with the fact that it doesn’t look towards considering the cultural aspect which has affected the overall productivity of employees. The proposed reward management system requires that McDonalds need to develop their reward management system based on the needs and requirements of the different countries where they operate. Along with it the reward management system should be detailed and provide the employees complete knowledge about the different parameters which will be used for evaluation of their performances. The overall reward management system should be such that it helps to bring gains and ensures that the employees contribution towards the business improves. Table of Contents Introduction 3 Present Reward Management System 3 Fit between Reward Management System & Company Strategy 5 Proposed Reward Management System 6 Recommendations 12 Conclusion 13 References 15 Introduction The success of any organization is largely dependent on the manner in which employees are compensated. Proper compensation and reward strategies help to ensure that the employees are satisfied. This acts as a motivation point through which the business is able to provide different requirements which the employees are looking at. This report looks to evaluate the reward management system for employees at McDonalds. The report will look into the reward management system for employees who are paid staff of the management. The report will work on different aspect and will look towards examining the present reward management system which is being used by McDonalds. This will be followed by matching the same with the fit that exist between the reward management system and the strategies which the organization has pursued. The report will then look to propose a reward management system for McDonalds which will help to improve the motivation level of employees and will act as a point through which better results can be achieved. At the end the report will present recommendations considering the present reward management system, the proposed reward management and the match between the reward management system and the strategy which has been adopted by the organization. This will thereby ensure that McDonalds will be able to provide better services and will be able to ensure that the employees are properly compensated based on their contribution towards the goals of the organization. Present Reward Management System The reward management system which is being presently adopted by McDonalds has been developed based on the needs of the organization in the country where they operate. The business has looked at transforming the reward management system based on the country they perform so that the cultural aspects can be met but has not been achieved to a large degree. The reward management system looks at ensuring that the process looks towards finding out the individual performance based on different parameters. It is unclear whether the employees have full knowledge regarding the different parameters based on which their employees performance is evaluated. The reward management system further ensures that a round table calibration is done but lacks the details which will help to improve the overall process and efficiency through which better reward system can be developed. The reward management system further looks to discuss the employees performance but the fairness through which the different parameters are looked and recognized is unclear. The overall process of reward management system is used but the different parameters are unclear and the manner and timing at which the employees are compensated has to be found out (Hackman and Oldham, 2006). The most important aspect here is to ensure that the reward which is provided to the employees is offered at the correct time. This will ensure that the employees get motivated and are able to carry out the different functions effectively. The current reward management system further looks at lacking effectiveness in dealing with the cultural needs and requirements of different areas. The reward management system needs to develop a process through which cultural requirements are identified and then the fit which will help to multiply the effectiveness of reward system needs to be developed. The process of developing a process through which detailed and better reward management system can be developed needs to be developed. The reward management system should be such that it should be detailed and the employees should be in a position through which they are able to identify the different needs of the business. This will help the employee to ensure better contribution towards the business and will provide an opportunity through which the employees can use the different skills so that the overall performance gets multiplied. This will help to ensure that the reward management system to be better developed and will provide an opportunity through which the different needs and requirements of both the organization and the employees will be met. This will thereby require certain modification and changes so that the overall process of reward management system gains effectiveness and the process help to maximize the process through which proper compensation is paid to the employees. Fit between Reward Management System & Company Strategy The reward management system which has been developed by McDonalds has been developed keeping in mind the global environment and aims towards using the same system at every place they work. This is creating problems and has resulted in increased dissatisfaction among the employees. To be effective it is imperative that the reward management system gets certain altercation and looks to be developed based on the needs and requirements of the local region (Heidemann, Waehrens and Boer, 2009). This will help to take care of the cultural requirements and will develop a structure through which the business will be able to maximize the gains from their operations. The other aspect of the reward management system is that is not descriptive as a result of which it doesn’t provides conclusive direction and areas to the employees based on which their performances are evaluated. This will require major ramifications and changes so that the business is able to develop compensation plan based on the different needs of the business (Herzberg, 2007). This will help the employees to understand the dimensions based on which their performance will be evaluated and will help to provide an opportunity through which their performance can improve. On the whole the reward management system which McDonalds uses has been developed keeping in mind the business strategies as it is evident from the fact that the performance of employees is evaluated based on factors which will enhance customer satisfaction. This shows a good match between the strategies that the business has looked to carry out and the different benefits which the business will gain through it. To be able to maximize the gains it becomes imperative that the business looks at identifying the compensation plan based on the local needs so that the business is able to develop the parameters through which better efficiency will be achieved and the employees will be motivated towards the goals of the organization (Kerr, and Slocum, 2005). Proposed Reward Management System McDonalds need to develop their reward management system in such a manner that performance and development of the employees align with the overall goals of business. This will help to attract and use the manpower in a manner that productivity will multiply. The entire process needs to be integrated with the other programs so that maximum effectiveness is ensured (Guzzo, Jette and Katzell, 2005). Some of the important linkages which must be considered are talent management, compensation, recruitment, and learning and development. This will help to develop the reward management system keeping in mind the various aspects through which employees are able to achieve better results. The proposed reward management system will thereby look to include the following Individual Performance Plan When Managers Employees Managers & Employees Beginning of accounting year Communicate the employees the objectives, mission, measure and target which is expected Develop individual plans for employees which will include performance objective, target and measure Conduct meeting to review, modify and develop the individual performance plan The above designed time table will help to develop business strategies and align them with the individual performance plan. The individual performance plan will help to ensure that the employee focuses on the objectives so that McDonald’s priorities can be achieved. This will help to ensure accurate assessment of the performance and the performance of the employees can be differentiated to determine the performance level. In the start of the accounting year the business unit department will look at aligning the objectives of the coming year, provide knowledge regarding the performance level and provide the necessary tools to ensure better performance. The measures will be further measured against SMART (Dainty, Raiden and Neale, 2004). This will be backed by proper training which will be provided based on personal development and ensuring that the knowledge and skills of the employees improve. The employees will have to carry out the role of matching the objectives and should be provided continuous feedback so that performance can be checked at the appropriate time and steps can be taken through which employees’ performance can be improved. Continuous feedback, coaching and support will bring about a complete change and transformation which will help the employees to be able to deliver performance and achieve the objectives which has been determined (Kohn, 2003). Individual Development Plan McDonald’s need to develop an individual development plan which will focus on leadership competencies, job specific competencies and functional competencies. This will help to identify the different needs of the employees to be successful and look towards developing the current and future competencies. This will help to develop a competency plan for each individual and will focus on the different needs and skills which will be required in the future (Carsrud and Brännback, 2011). The main focus here will be to ensure that employees look towards understanding the different skills which they need to acquire so that they are able to deliver superior performances. This will ensure that the reward management system will be effective and the evaluation of the employees’ performance will consider all the different factors through which performance can be improved and better compensation and incentives can be provided. The overall reward management further needs to ensure that the reward management is developed based on the local needs so that the different cultural requirements and needs are met (Locke and Latham, 2004). This will help to multiply the effectiveness and will reduce the future risk for the business Mid Year Review The midyear review will take place after 6 months and will review the performance of the employees so that appropriate steps can be taken at the correct time and the employees are able to make the changes so that they receive better rewards. This is as follows (Milgrom & Roberts, 1992) Objective Completion Date Measures Reduce cost and wastage so that project cost saving measures is developed Completion of 6 months Reduction in the cost compared to the previous cost which was paid Improve the process of administration and reduce the amount of time managers spend on administrative functions At the end of 4 quarter Redesigning a process so that the cycle time for the different expenses is controlled The above measures are some examples which needs to be developed based on the project requirements and measurement measures should be developed so that timely changes can take place in the performance level Year End Review At the end of the year the review of the performance for the employees will be carried out so that the compensation which needs to be paid to the employees will be determined. Each employee along with the manager has to come across a face to face communication so that the managers understand the different accomplishments which have been achieved by the employee and need to carry out through a calibration roundtable (Kerr, 2009). The accomplishments will be rated against different employees performance driver ratings so that the yearend performance of each employee is understood and the future advancement which is possible. At the beginning of the next year employees performance is evaluated based on the contribution and the goals for each employees is determined. The overall reward management further needs to ensure that the reward management is developed based on the local needs so that the different cultural requirements and needs are met (Chen, Ford and Farris, 2009). This will help to multiply the effectiveness and will reduce the future risk for the business. This will look at measuring the performance based on two areas Firstly, the results which have been achieved based on the performance and will constitute around 75 percent of the weight age Secondly, the manner in which McDonald’s performance driver has been achieved and will constitute around 25 percent of the weight age The different drivers which McDonalds will look to have in the performance measures are as (Mahaney and Lederer, 2006) Clear objectives along with the results and accountability which has been achieved Provide the required coaching and values to the employees Act in the interest of the organization Ensure proper communication between the employees, management and customers Ensure changes, creativity and make innovation within the organization Ensure strategic focus The different ratings which the employees are provided on the above parameters will be combined so that the performance of the employees can be evaluated. The managers based on the ratings which is provided to the different employees will assign a preliminary rating based on the results which were achieved, the different performance driver and performance level (Kaplan, 2005). At the end of the year the managers will attend a performance calibration round table and will look into the performance of all the peers and supervisor so that rewards can be allocated to the employees based on their contribution towards the organization. This will look at discussing the employees’ contribution towards the goal of the business (Latham and Pinder, 2005). This will act as a benchmark and will help to review the performance so that the business is able to find out the parameters and mechanism based on which employees reward system will be developed. Performance Calibration Round Table The reason for having a performance calibration round table is to ensure that the overall quality and fairness of the ratings improves so that employees reward system is developed on the correct parameters and the performance level of each employee. The overall reward management further needs to ensure that the reward management is developed based on the local needs so that the different cultural requirements and needs are met (Boyne and Hood, 2010). This will help to multiply the effectiveness and will reduce the future risk for the business. The performance calibration round table will look to have the following guidelines Rating Label Distribution 4 Exceptional performance 20 percent 3 Significant performance 70 percent 2 Improvements are needed 10 percent 1 Unacceptable performance 10 percent Having a performance calibration roundtable will minimize the role of inflation in ratings and will ensure that the significance of the different ratings to the different parameters are properly discussed. This will also ensure that the group which is diverse is able to come together and discuss the performance of the employee over the year and based on different inputs identify the factors which needs to be considered while developing a reward management system (Bandiera, Barankay and Rasul, 2010). This will also help the employees to understand the different parameters and will help to maximize the manner in which decisions are taken by the employees regarding their future. Talent Review Round Table While looking to review the performance of the employees for the past year it is imperative that the management further aim towards determining the readiness for advancement so that steps can be fostered in that direction. The round table will provide an opportunity to discuss the different strengths and weakness of the employees which will help to understand the different skills which the employees have and the manner they will be able to carry out the different functions in the future (Samuelsson, Ekendahl and Ekevärn 2006). This will allow an opportunity where the business requirements will be matched with the employees skills and based on it employees future will be decided. This will also help to identify the different future needs regarding training and will help to develop a plan through which better chances of being able to achieve the future goals can be ensured. The overall reward management further needs to ensure that the reward management is developed based on the local needs so that the different cultural requirements and needs are met. This will help to multiply the effectiveness and will reduce the future risk for the business (Samuelsson, Ekendahl and Ekevärn, 2006). Recommendations McDonalds to be effective in carrying out their different operations need to look at evaluating the different parameters which will multiply their business and will ensure maximum customer satisfaction along with employee motivation. This will require that the present reward management system undergoes certain changes. McDonalds thereby needs to consider the following recommendations McDonalds need to develop their reward management system based on the needs and requirements of the different countries where they operate. This will require that the reward management system is developed based on the cultural requirements of the country. This will help to deal and take care of the different business requirements which will have a role in employees’ motivation and will act as a point through which maximum efficiency and effectiveness will be achieved (Deci, 2002). The process of matching the reward management system with the cultural needs will maximize the gains and will ensure that the business is able to work in a better and coordinated manner. McDonalds further need to ensure that the reward management system is detailed and provides the employees complete knowledge about the different parameters which will be used for evaluation of their performances. This has to be matched by the fact that the employees performance needs to be monitored regularly and timely training and other aspects which will help to bring overall efficiency in the employees’ skills should be considered (Kyriacou, 2010). The overall reward management system should be such that it helps to bring gains and ensures that the employees contribution towards the business improves. Conclusion The report thereby looks towards analyzing the reward management system which is being used by McDonalds and proposes the changes which will be required so that better effectiveness in the working process is achieved. The changes will be looked through a process where they look towards ensuring that the changes provides a better match with the business strategy and ensures that the business is able to improve their chances of being effective. This will help the business to use the different resources effectively and will multiply the effectiveness through which different business decisions are taken. References Bandiera, O., Barankay, I. and Rasul, I. 2010. ‘Social Incentives in the Workplace’, The Review of Economic Studies, 77 (2), pp. 417 – 458. 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