Essential Theories of Motivation and Leadership in McDonalds - Term Paper Example

Table of Contents Table of Contents 1. INTRODUCTION 3 1. Purpose & Aim of the Report 3 2. Rationale for the Choice of Business 3 3. Synopsis of the Company 3 1.4. Problem Description 4 1.5. Research Method 4 2. Discussion & Findings 4 3. RECOMMENDATIONS 7 4. Conclusion 9 List of References 10 Executive Summary The report is based on a multinational food retail service “McDonalds." The report identifies different factors that influence the motivational level of employees in the organisation. The employees of McDonalds in UK, US, Germany and China, are highly demotivated due to the low-wage rate, lack of opportunities, no or fewer benefits, poor working conditions and infrastructure. McDonalds can use the management theories proposed by management experts, in order to increase the motivation of employees. Theories like Maslow hierarchy of needs and two factors theory can help the management of McDonalds to ensure the motivational aspects of the employees. However, change management is also a part of increasing motivation, which should also be considered. McDonalds has to take immediate actions if the company wants to enhance the motivation level of its employees. 1. INTRODUCTION 1.1. Purpose & Aim of the Report The purpose of the report is to evaluate the factors that drive towards demotivation of the employees working in McDonalds. The aim of the report is to give possible solutions to the motivational issues faced by McDonalds based on motivational theories. The focus of this study is to find out the different opinions and perspectives of the employees working in McDonalds. Employees working in countries like UK, US, China & Germany, are facing many problems, which leads to demotivation. Employee views are always in contradiction with employers, and this contradiction creates issues and conflicts. Thus, the study is focused to find out the factors leading to demotivation and analyse the possible solutions concerned. 1.2. Rationale for the Choice of Business McDonalds, as an organisation is serving 70M customers globally and the company has employed around 1.9M people globally (McDonalds, 2014a). Thus, research of a multinational company will help in increasing the knowledge about foreign boundaries and parameter. Moreover, the “McDonalds Legislation” which was acquired by McDonalds is new legislation in the global context. Thus, research on such organization will help in understanding the pattern as they become trendsetter. 1.3. Synopsis of the Company McDonalds is a huge name as a foodservice retailer globally. McDonalds has over 35,000 locations serving 70M customers globally in 100 countries. Independent owners operate more than 80% of the McDonalds franchises (McDonalds, 2014b). The goal of McDonalds is to become the customer’s favourite dinning place where they can get their core favourites (Singer, 2014). 1.4. Problem Description McDonalds acquire “McDonalds Legislation” according to which they can pay 20% less to the teenage employees compared to the federal government. This leads the employees of McDonalds to have the motivational problems (Jean, 2013). Therefore, this is a factor for demotivation for the employees working in McDonalds. Different unfair practices implemented at the organization results in reducing the motivation level of employees at the workplace. McDonalds as an employer is facing problems related to motivation globally; Such as UK, Germany, China and US. Apart from this lack of effective management is also affecting the business of McDonalds (Kim, 2014). The report focuses on the underlying problems of motivation resulting in demotivation of employees at the McDonalds. The report also presents possible solutions to increase the motivation by using different motivational theories. The aim of the study is to determine the views and perceptions of the employees and relate it to view through motivational theories. Data collected for this research study is from UK, China, Germany and US market. 1.5. Research Method The research method directs the study in the particular direction (Saunders, Thornhill, & Lewis, 2009). Research method used in the study is secondary data analysis. Articles, websites, research articles, books, will form the basis for information. This information from these sources will be used to find information and possible solutions. 2. Discussion & Findings The report revolves around the context of McDonalds UK, Germany, China and US. Every region has different diversified workforce and has different factors that influence their job dynamics. In the context of McDonalds Germany, the employees get a five minutes break every two hours, which is quite less as compared to the hours working. The pay is 6.17 Euros per hour between 10:00 p.m. and 6:00, which is less than expected (McSpotlight, 2002). In the context of US market, the workers at McDonalds are forced to work on Christmas day and it has been reported that they did not receive overtime for working too long. According to a study conducted in UK, the employee-employer relationship in McDonalds operating in UK is not good. The reward system of UK found to be unacceptable. Majority of the employees are of the view that the reward system has to be changed. Moreover, the career opportunities provided in McDonalds UK is not even at the stage of acceptability. Majority of the employees think that they would not choose McDonalds as they future career advancement. Majority of the employees are of the opinion that the crew members worked hard in comparison with their managers. The wage rate, which is always considered as an important driver of motivation, was unfair according to the employees of McDonalds. About 85% of the employees during a research say that the wage rate is unfair (Nawaz, 2011). The diversity factor is again important factor in the context of McDonalds. In UK & Germany, the workforce consists of people from diversified regions. However, in UK the workforce predominantly consists of young workers with less experience. On the contrary, Germany workforce mostly consists of older and foreign workers. Thus, almost all the employees working in these regions enjoy diversity (Royle, 1999). McDonalds in China is also facing critical motivational problems. The management of China is quite young. Employees take trainings from the entry-level employee and move through basic training system. Globally if some employee is promoted as manager he / she gets an opportunity to visit Hamburger University but in China, there is no such university. Employee of McDonalds in China believes that it is just a job that they are doing for money. In China, employees are not entitled to some benefits, which other people working outside McDonalds are getting like educational assistance. Competent employees do not have the option of the stock purchase too. All of the above reasons are the factors that lead to demotivation for the employees working in UK, US, Germany & China geographical boundaries. McDonalds applies Maslow’s hierarchy of needs. The theory has five levels of human needs, which starts with psychological level, which is normal in nature. According to the theory, this level is achieved then only one can move to another step (Van Raaij & Wandwossen, 1978). Next level is of safety where the employees feel safe within the environment. The study shows that one structure will increase the performance of the workforce that can be money (Rainlall, 2004). Therefore, McDonalds can apply this motivational theory. McDonalds focuses the above two continuum but it has neglected the other. The company should recognise the competent employees working within the organisation and providing benefits according to their expectations and amount of hard work they are putting in. The appreciation will take employees at a level of Self-Esteem and thus leads to self-actualisation. McDonalds can apply the two-factor theory proposed by Fredrick Herzberg according to which two factors can distinguish satisfaction and dissatisfaction (Robbins & Judge, 2012). The two factors are “true motivators” and “hygiene factor." Hygiene factors are those, which are present within in the context of the job (Laurie, 2013). Just increasing the wages and safety concerns would not encourage an individual. However, there absence might leads to dissatisfaction (Latham, 2011). To increase productivity and output level managers need to encourage their workforce by positive feedbacks and appreciate them (Andrzej, and David, 2013). These factors are known as “true motivators." These are the factors that motivate employees and encourage them to accept challenging goals (Nawaz, 2011). McDonalds has to improve on both the factors mentioned above. As already discussed above the benefits, pay and incentive are quite low in all the regions of the study (Carden, 2013). Secondly, the recognition for work especially in China is the most prominent factor that leads to dissatisfaction. Thus, McDonalds has to organise such events and meetings in which the company can appreciate their workers in terms of benefits and praise. Equity theory is one of the most acceptable theories that can be applied in the context of McDonalds. The employee compares his or her own output and input ratios receive from the workplace and compare it with another person working within the same domain. Unequal ratios result in dissatisfaction while equal ratio encourages motivation. The employee will try to raise their input in order to increase their returns (Meyer, Becker, & Vandenberghe, 2004). As outcome consists of pay, benefits, incentives, job security, opportunities that are the source of demotivation for the employees working under the umbrella of McDonalds. The management should try to match up the ratio between the workforces. As indicated in the case of China, the ratio of input / output is not equal all over the globe. McDonalds US, on the other hand, has cut down the salary and benefits of the young employees. Thus, the ratio should be kept in focus and try to adjust in such a way that the performance will leads to greater output. A change management initiative at McDonalds can also be initiated through Force field analysis proposed by Kurt Lewin (Miner, 2005). Change management is important from the perspective of both employees and employer. In such a scenario, an employee must be highly motivated in order to give suggestions. Moreover, it also reduces resistance to change, as the upcoming change is implemented from mutual consensus of both employee and employer. Secondly, the management should have a readiness to accept the suggestions and ideas and then bring necessary changes according to it. The management should describe the current situation, which lacks some factors, and then describe the desired situation in order to bring a change (Baulcomb, 2003). McDonalds should encourage such changes in order to increase motivational aspects and bring necessary changes, which is beneficial in term of output. 3. RECOMMENDATIONS Seeing the above scenario, it can be concluded that McDonalds does not take into account the motivational factors of employees, which are centrally important in order to retain the best talent and highly skilled employees. As of survey results, employees are highly unsatisfied and unmotivated to perform tasks due to the ignorance of their core concerns. To overcome this dilemma, company will have to consider the following recommendations for a successful employee management. Management should impose the proper reward management system throughout the organisation. Reward system must include monetary as well non-monetary rewards to keep the morale of employees high. Monetary rewards are the best source of motivation, so company should give proper financial incentives to its employees for every work task accomplished. Give bonuses, pay-for performance, promotions to employees to increase their productivity. Non-monetary rewards are becoming the most influential factor to encourage the employees at work. The Herzberg two-factor theories depict that intrinsic factors such as appreciation, recognition, thankful note, influence the behaviour of employees to a greater extent than extrinsic factors which pay-for performance, bonuses and many more. This proves that employees are responsive to littlest things like recognising efforts of the employee in front of senior managers, thank you note, appreciation, good feedback and they tend to perform more productively if appreciated. McDonalds must incorporate non-monetary reward system in the company to a greater extent to unleash the hidden potential of employees. Company must take into consideration the basic needs of employees and satisfy them to the fullest. According to Maslow’s hierarchy of needs, if employees’ lower order and higher order needs are fulfilled, they are more likely to achieve goals and objectives of the company (Boone & Kurtz, 2009). Meet the needs of employees that boost their self-esteem, psychological and safety aspects. For example, give proper lunch time break, show concern for their health, build constructive environment and respect the creativity and individualism of every employee and so on. 4. Conclusion McDonalds is encountering the severe challenges in building healthy employee-employer relationship. Employees have reported critical issues regarding work environment, pay structure, and other benefits that adversely impact the motivational aspect of every employee. The report is based on company’s employee management issues in UK, Germany, China and US. Issues like low-work hour pays, fewer opportunities to career development, unease time flexibilities, high level of dissatisfaction, no reward systems in the organisation have led the employees to de-motivate. In this regard, report has discussed the theories related to motivation and satisfaction of employees and their impacts on employee performance. It is highly recommended that the company should implement various reward systems throughout the organisation. In order to achieve a competitive advantage over others, the company should motivate its employees through different approaches. Different geographical and demographical consideration is important to develop a motivational plan, but the management should manage it in such a way that it could lead to proper motivational drivers.  List of References Andrzej A. H, and David A. B (2013). Organizational Behavior. Edinburgh : Pearson Education Limited Baulcomb, J. S. (2003). Management of change through force field analysis. Journal of Nursing Management, vol. 11, no. 4, pp. 275-280. Boone, L. E., & Kurtz, D. L. (2009). Contemporary business 2010 update. John Wiley & Sons. Carden, A. (2013). Would A Higher Minimum Wage Help McDonalds Workers? Available from http://www.forbes.com/sites/artcarden/2013/07/30/would-a-higher-minimum-wage-help-mcdonalds-workers/ [Accessed 20 July 2014] Jean S,. (2013). Real-World Examples of Bad Business Ethics. Available from http://www.brighthub.com/office/entrepreneurs/articles/115557.aspx [Accessed 20 July 2014] Kim P,. (2014). 3 Problems Dragging Down McDonald’s. 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