McDonalds Teams and People Management - Case Study Example

McDonalds Teams and People Management Student’s Name Institution Course Name & Number Date of Submission McDonalds Teams and People Management Introduction MacDonald’s is American multinational fast food restaurant founded in 1940 by McDonald’s brothers. The San Bernardino-based restaurant has grown over the years to become a global figure with operations in over 120 countries (McDonald’s US. 2017). McDonald’s is currently ranked the world’s largest fast food restaurant and is seen as a symbol of globalization. The company serves at least 58 million customers across the globe daily. McDonald’s global expansion has been based mainly on franchising as the company currently operates several franchising stores across the globe. The company’s main product and service offerings include hamburger, French fries, chips, chicken fries, egg and juice. In a bid to increase its market, McDonald’s has since introduced beverages, such as coffee and tea as part of its product offerings (Blackmore, 2015). Despite being the world’s largest fast food store, the company faces stiff competition from other established fast food stores that include Wendy’s, KFC, Burger King, Subway, Yum Brands, Starbucks, Chipotle, Panera and Taco Bell. During the fourth quarter of 2016, McDonald’s reported revenue totaling $6.03 billion and profit of $1.2 billion (Reueters, 2017). McDonald’s is also the biggest employer in the fast food restaurant industry employing more than 375,000 people working in it’s over 36,899 restaurants spread across more than 120 countries (Burn-Callander, 2015). Despite strong performance, the company has been facing people management issues that have seen the restaurant experience perennial employee strikes in its different locations (CHOI, 2015). This report begins by analyzing team work at McDonald’s using Tuckman and Belbin’s team development theory. The report will proceed to undertake a SWOT analysis of McDonald’s position in the labor market. The third part of the report discusses the people management implications of the SWOT analysis. Based on the findings from SWOT, the report will provide recommendations to address the people management issues to become a good employer. Finally, the report will conclude with a brief takeaway lessons learned. Analysis of Teamwork at McDonald’s Teamwork is critical to the success of an organization. A wide body of literature indicates that companies in which managers and employees work as a team perform better than those in which teamwork is lacking (Johnason, 2009; Robbins & Judge, 2017; Baron & Kerr, 2003). However, Meredith Belbin observed that, to operate effectively, a company team requires members with diverse skills, knowledge and attributes. In her team role theory, Belbin proposed nine team roles, namely plant, resource investigator, co-ordinator, shaper, monitor-evaluator, team worker, implementer, completer and specialist (figure 1) (Belbin, 2012, p. 3). Belbin argues that an effective team must possess at least five or the nine team roles and that a member of the group has to be capable of effectively performing at least one of these roles, but seldom more than two (Keen, 2003, p. 39). Belbin team role model was expounded by Tuckman’s 1965 Model that elaborates stages of team development. According to Tuckman, there are four stages involved in team development namely forming, storming, norming, and adjourning (Baron & Kerr, 2003, p. 21). (figure 2). Each of these stages are important in the development of an effective team, argues Tuckman. In other words, Tuckman’s Model maintains that when workers are brought together to work as a team, they go through an evolutionary process beginning forming where members of the team experience uncertainty followed by storing which is a stage characterized by conflicts and misunderstanding among the members of the group. From storming, the group moves to norming, where relationships start to be built as members get to know and appreciate each other (Halverson &Tirmizi 2008. P. 83). The stage then transitions to the performing stage, where the group is now fully functional and finally adjourning that involves winding up. Figure 1: Belbin Team Role Model Source: Belbin 2012. Figure 2: Tuckman Model Source: Halverson and Tirmizi 2008. Evidences suggest that Tuckman team development model can be applied universally in all situations. However, its effectiveness increases when used alongside Belbin teal role model. In this respect, Brown (2000, p. 105) indicates that, when the two models are used together, it becomes easier to figure out whether or not a team is likely to succeed based on the attributes and skills possessed by the members of the group. Both Tuckman and Belbin’s team theories are applicable to McDonald’s whose competitiveness and success depends on the ability of the restaurant to develop an effective team. Indeed, observation of the working at McDonald’s underscores the importance of teamwork. It is notable that each and every employee has defined role which they have to focus their energy and skills on to ensure the achievement of greater efficiency and quality products and services. In any of the McDonald’s over 36,899 restaurants, there is an individual who is assigned the responsibility of taking orders and payments from guests (McDonald’s UK, 2013). Depending on the size of the restaurant, there are a team of employees of two, three or four employees who are assigned the role of taking orders from guests and serving the meals ordered by guests at the right table and in accordance with the orders made. There is also a team of employees whose main area of focus is ensuring that the restaurant is tidy and clean and that it is well stocked (Parkinson, 2015). Moreover, there are a group of chefs who work all rounds together as a team to ensure that guests have the right meals of the right quality and taste anytime they check in the restaurants (McDonald’s UK, 2013). Accordingly, it becomes apparent that high level of team communication and coordination is needed to ensure effective teamwork at McDonalds. At the same time, the fact that employees are assigned different roles that require teamwork implies that high level of trust is needed at McDonald outlets in order to ensure the success of the company. Moreover, the fact that two or three chefs can work on the same order made by guests means that high levels or coordination and communication and understanding among the employees at the company is needed to ensure the smooth operation of the company (Parkinson, 2015). Therefore, based on the analysis of the team working at McDonald’s it becomes apparent that the team is to the very least, at the norming stage and at best performing stage based on Tuckman’s team development model. It has become evident that the employees have passed the storming stage of team formation as there is no longer conflicts between members of the groups as the teams have reached a stage where everyone understand each other’s strengths and weaknesses and are willing to support each other to ensure the achievement of team objectives at the restaurant. SWOT Analysis in the Labour Market Strengths McDonald’s has a variety of strengths in the labor market that it uses as a source of competitive advantage. First, the fast food giant has a team of highly skilled employees that ensures the delivery of consistently high quality products and services to customers at it are over 36,899 restaurants across the globe. McDonald’s has over 375,000 highly skilled employees consisting of chefs, baristas, service team and the management that work as a team to ensure the delivery of consistently high quality meals and services to guests (Burn-Callander, 2015). Developing a highly skilled team begins with effective recruitment process that identifies the best candidates in the market, who are then subjected to vigorous training before being assigned roles at the company. This ensures greater efficiency in the delivery of quality services at all the McDonald’s outlets. Second, McDonald’s has a robust diversity management program that improves its position in the labour market. In the modern world, diversity is not seen merely as a way of complying with the laws. Instead, diversity has become a tool that companies used to gain a competitive advantage in an industry (Herriot & Pemberton, 1995. P. 89). McDonald’s is an example of a restaurant that has made diversity part of its business model by ensuring that candidates applying for a job are given equal opportunity regardless of their culture or background. This has seen McDonalds become one of the most diverse companies in the world having employees from different ethic, gender sexual, religious and racial backgrounds. Diversity of the labour for is strength for McDonald’s in the labour market as it makes the company not only attractive to employees, but also the fact that McDonald’s uses unique skills of its diverse workforce to promote innovation and creativity, which ensures business success. Additionally, McDonald’s has effective leadership, which is strength for the restaurant in today’s highly competitive labour market (Foti & Hauenstein, 2007). Weaknesses McDonald’s has certain weaknesses in the labor market that it will have to address to improve its image as an employer. First, the company has poor relations with employees. The company has been having poor relations with its employees across the globe. The bad relations is created by complains of poor working conditions, working for longer hours without adequate compensation and poor pay (Blackmore, 2015). Second, high turnover experienced by the company is a serious weakness that paints bad picture about the company as an employer (Wilkinson, 2017). A senior manager at McDonalds puts the turnover rate at 44%. Globally, McDonald’s staff turnover rate stands at 20% while that of the crew stands at 80% to 90%, which is above industry average. Opportunities There are opportunities that McDonald’s can tap on in the labor market to improve its competitiveness. First, there is a growing population of educated people and this means that McDonalds will be able to get the skilled labor easily across the globe. Second, with globalization and technological developments, McDonald’s has opportunity to outsource or offshore some of its HR functions, such as recruitment of staff (Burn-Callander, 2015). Additionally, McDonald’s has opportunity to tap into the latest technologies in recruiting and training its staff in a more cost effective manner. Threats McDonald’s faces certain threats in the labor market. First, rising cost of labor in the global market is a major threat to the company’s profits. Second, the increased unionization of workers in most of the countries where McDonald’s operate is a threat to the company. Additionally, McDonald’s faces a threat from rival companies with which it competes for top performers in the labor market. Most employees now want to work only on part-time basis (Press Association., 2017) People Management Implications of SWOT The SWOT analysis above indicates that McDonald’s is experiences a number of weaknesses and threats that have implications on people management. The weaknesses identified in the SWOT indicate that McDonald’s is experiencing serious people management issues. From the SWOT, one of the weaknesses of McDonald’s has to do with poor employee relations. Armstrong (2003, p. 22) and Gennard and Judge (2005, p. 14) argue that maintaining health employee relations is critical to organizational success. This is because positive relations help build highly efficient, productive and motivated workforce, which consequently increases output and sales, according to Marchington (2002, p. 201). Unfortunately, McDonald’s is having poor relations with its employees who have persistently demonstrated over poor working conditions, being forced to work many hours without adequate compensations and being paid poorly (CHOI, 2015). The consequence of poor people management is that it has affected the image of McDonald’s as an employer in that top performing employees are not attracted to the company and this plays to the disadvantage of McDonald’s. In fact, McDonald’s has been ranked poorly as an employer because of poor people management. Besides, the company has been experiencing high turnover of even up to 80% and 90% for crew because of poor people management. Accordingly, this implies that McDonald’s must improve on its approach to people management if it is to redeem its image as a poor employer. Recommendations The analysis has unearthed McDonald’s major weaknesses and threats in the labour market that it needs to address to improve its image as a good employer. First, poor employee relation is one of the biggest weaknesses of McDonald’s and this impact negatively on the firm. Therefore, to improve the image of the company, the management of McDonald’s needs to focus on improving employee relations. It is recommended that the leadership of the restaurant do this by engaging the employees in key decision makings to understand their issues and how they wish they should be addressed (Dicker, 2003. P. 57). Involving employees in decision making means that McDonald’s might require changing its organizational structure and leadership style by adopting a flatter organizational structure that promotes communication between top leadership and the subordinates and adopting a democratic, participative style of leadership instead of authoritarian leadership approach (Gilmore 1999, p. 98; Gill, 2011, p. 44). This way, the company will be able to build a good working relationship with the staff, thus helping create a healthy working environment, where employees can give their best. Secondly, the management of McDonald’s can address the weakness of high turnover by keeping its employees highly satisfied and motivated. Abraham Maslow in his theory of hierarchy of needs, he observed that employees need to be highly motivated in the workplace so as to increase their commitments to firm goals and objectives (Bratton & Gold, 1999, 56). The importance of motivation in increasing employee commitment to an organization has been supported by Herzberg's Two-Factor Theory of motivation (Armstrong, 2009. P. 36). Therefore, to improve the image of McDonald’s as a good employer, the management of the company should consider enhancing the motivational levels of the employees. The company can do this by applying both intrinsic and extrinsic motivators that include offering attractive salaries and compensations, improving the working environment and terms, rewarding top performers and increasing training and career development opportunities in the company (Bratton & Gold, 2007, p. 19). This way, the company will be able to turn around its image from a poor employer to a good employer, suggest Cheese et al. (2008, p. 64). Additionally, it is recommended that McDonald’s introduce flexible working arrangement such as telecommuting and part-time work to attract the growing number of talented employees who are looking for employers who provide flexible working arrangement. Wider Purposes That Could Be Served For the Company In the event that McDonald’s succeeds in turning around its image as a poor employer, there are a number of things that it will have to do to maintain a good image in the labour market. First, the company will have to introduce flexible/work-life working arrangements that include time off work/career break. This is important as it will give employees time to attend to families and personal issues. Ulrich (1997, p. 54) notes that most employees now look for employers that provider work-life programs. Therefore, allowing employees to have tome off work will make the company attractive to potential employees, notes Boxall (2008, p. 11). Second, McDonald’s will have to consider introducing social life/marketing. In this respect, McDonald’s will need to ensure that it promotes social life in the company to make it attractive to prospective employees. Third, to build on the good image created, McDonald’s will need to improve on its training and development program. Benson et al. (2004, p. 204) state that, in the modern world, employees are looking for employers who provide opportunity for growth and career development and this will only be possible by providing training opportunities to all members of the staff. Fourth, McDonald’s will need to design qualifications and ensure that it hires the best talents in the market. This is important as it will ensure that the restaurant maintains recruiting high quality and skilled employees to drive its objectives. Additionally, the company will need to introduce pay pension as a strategy of rewarding effort and motivating the staff (Buchanan & Huczynski, 2017. P. 84). The Pay pension, however, need to be attractive in order to have a motivational effect. Lastly, it will be important for McDonald’s management to ensure that employees who deliver are promoted as a means of rewarding efforts as this would have a motivational effect on employees and increase their satisfaction level. Conclusion McDonald’s is the world’s largest fast food restaurant currently operating more than 36,899 restaurants in more than 120 countries. The analysis has found that team work plays an important role in ensuring growth of the restaurant. Based on the analysis of team work at the company, it emerged that team work at the company is at the least in the norming stage and at best performing stage based on Tuckman’s model. The SWOT analysis of McDonald’s position in the labour market found that the fast food giant has certain witnesses and threats that it needs to address to redeem its image as a poor employer. The weaknesses include poor employee relations and high turnover rate. It is proposed that the company address the issues by improving employee relations and using motivational strategies to keep employees’ morale and satisfaction high so that they can commit to the company objective and to make the restaurant attractive to prospective employees. References Armstrong, M., 2003. 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