Practices And Policies Of Mcdonalds Corporation - Research Paper Example

Practices And Policies Of Mcdonald’s Corporation 1. Introduction 1.1 The overall theme In any business, the most important aspect which determines inevitable success or failure will lie in the human resources component. Human resources is a misnomer; humans are not resources that are procured, deployed, and consumed in the course of operations. They are a part of the firm’s soul and spirit, its innovative drive that adds value to the product or service. There are companies that tend to forget this in their pursuit of doing things better, faster, farther, and more profitably. When companies tend to forget their people’s welfare, they tend to lose their soul and spirit. 1.2 Scope of the problem This study deals with an examination of the policies and practices of McDonald’s Corporation in so far as they deal with the human resources management of the company. McDonald’s will be viewed as a multinational enterprise, and will be evaluated on the basis of news reports and data on its store operations worldwide. Information from the past two decades shall be considered, and implications on personnel motivation and human resources development shall be drawn. 1.3 Objectives The objective of this study is to collate data on the motivation of McDonald’s employees as published in the various news publications from reputable sources on the internet. It shall also obtain feedback information and accounts from the McDonald’s Workers Resistance, a group of disgruntled McDonald’s employees, and try to corroborate these accounts with facts provided in other disinterested sources. Then the information shall be analysed against the framework provided by the motivation theories of Maslow, Herzberg, Vroom and Adam, as discussed in the review of related literature. 1.4 Nature of the problem The problem involves the development of a theoretical critique of existing practices and policies of McDonald’s Corporation, and is meant as a cursory survey of the challenges the firm faces with regard to its human resources management. 1.5 Justification for the chosen topic McDonald’s provides an interesting case subject. It is international in scope yet uniform in operations, making it a curious embodiment of Taylor’s Scientific Management principles. Many accounts have labelled McDonald’s methods as “robotic” and “mechanistic;” however, its commercial success has become the envy of its competitors, to the point that its model has been adapted and at time mimicked by them. The study is meant to begin the germ of an analytical paradigm that may be developed into a full blown dissertation in the future, as well as provide insight to managers concerning the implications of the McDonald model. 3. A Chosen Empirical Case: McDonald’s 3.1 Introduction McDonald’s describes itself as “the world’s leading fast food chain with more than 30,000 outlets in 121 countries, serving 46 million customers each day” (McDonalds.com, 2009). Its fare consists of burgers and fast food that are reformulated to suit the local preferences. Its philosophy is “one world, one burger,” conveying the meaning that all throughout the world, McDonald’s serves the same quality burger at the same cost (Center for Management Research, 2002). In order to maintain the same high quality standards, not only of burgers but also of store environment and service, over thousands of McDonald stores worldwide, the company must have a way of training and motivating store personnel to consistently yield high quality performance and products. Last year, during the early stage of the recession, McDonald’s sales picked up as their dollar menu and discounted rates attracted customers from higher-priced establishments . (Datamonitor, 2009). However, this trend reversed this year, as joblessness caused former patrons to turn away even from its budget meals. Sales realised by McDonalds fell 0.6 percent in the US (Heher, 2009). 3.2 McDonald’s HR Track Record At first blush, the claims of abusive employee treatment by McDonalds and allegations of unrelenting work routine and oppressive human resources appeared outrageous, because after all, McDonalds is a well-loved family restaurant the world over. However, Schlosser (2002) documented a typical day of a McDonald’s crew member that starts at 6:00 o’clock in the morning. The manager unlocks the door, and with two crewmembers undertake a step-by-step routine outlined by the employee handbook to the last detail until the store opens for service at 7:00 o’clock. All activities are time-standardised, all McDonalds stores are equipped with the same custom-made ovens and grills, and all procedures are rigorously detailed and observed. The actions of store employees are “McDonaldised,” meaning that while other jobs are increasingly being rationalised and enriched, McDonalds was increasingly regimenting and mechanising its employees’ actions, up to the service “script” flashed to counter crew members as they communicate with customers with a mandatory smile. Schlosser also reports that one in eight Americans become McDonald employees at some time in their life. A news article in Counterpunch by MacDougall (2003) reported the following, among others: 1. A French court threw out attempts by McDonalds to dismiss French employees on false charges, even as a documentary entitled “On n’est pas des steaks haches” -- “We're not minced steak” - was released to the public on October 16, International Anti-McDonalds protest day; 2. Members of the McDonalds Germany employees’ resistance leafleted customers and workers to boycott McDonalds stores with the slogan “McJob? No Thanks!” 3. A demonstration of McDonalds workers in Mexico ended with 94 arrests “on dubious charges of damage to federal property and carrying explosives (fireworks)”; 4. Female McDonalds workers in Liverpool put on make-up (McDonalds normally prohibits it) as an act of defiance; 5. More radical tactics employed by disgruntled employees included altering food storage and microwave settings, resetting grill timers, working strictly to rule, and ultimately strike action. Employees’ complaints have been aired during their protest marches as well as in employee newsletter McSues released by the disgruntled employees. The include the following: 1. Work at McDonald is dehumanizing because every tiny action is regimented, making procedures “almost completely robotic” (MacDougall, 2003). 2. Pay is poor, management is autocratic. 3. Company stipulated “appearance requirements” require mandatory compliance. 4. Company managers save on labor expense by altering clock card entries, in effect comprising theft of wages. 5. When your shift finishes, you are not free to go but are obliged to stay if management demands it; 6. You can’t go to the toilet without obtaining permission. 7. If shift is quiet and more than enough staff are present, some staff will be told to go home and suffer a day’s loss in wages. If the employee insists on staying, he is given the most menial jobs. Finally, the New York Times in June 7, 2008, reported that Hiroshi Takano, a store manager at the McDonald’s Company in Japan, filed claims against McDonald’s for the deterioration of his health. Mr. Takano regularly worked until the early morning hours during his tenure as store manager, but McDonald’s refused to pay for overtime. He sued in 2005, and after three years won his case. A Tokyo court ordered McDonald’s Japan to pay Takano US$75,000 in back overtime wages. After the decision, four other former McDonald’s store managers filed a similar suit. This is remarkable, coming from Japan, because there employees are usually loyal, silent, and as a consequence, long-suffering. 3.3 The McDonald’s Workers Resistance The members of the McDonald’s Workers Resistance, or MWR, describe their organization as “a loose network of McDonalds HOURLY PAID workers who agree that the workers and the company have no interests in common and who agree to help all hourly paid McDonalds workers against the company regardless of ethnicity, sexuality, nationality, etc.” The organisation aims to employ a combination of “solidarity and direct-action to take wealth and power from a bunch of indolent fat cats in order to redistribute it equally amongst the hourly paid workforce” (MWR Aims and Principles, 2002). The organization claims to have no leader nor structure, except for a network of individuals who coordinate and work together while remaining anonymous. MWR avows that it “can never be used for party politics or to make money.” The MWR website provides a brief history of the group. It describes the original members as staff that began working for McDonalds in Glasgow, Scotland, between 1996 and 1999. They came to work for McDonalds for various reasons, the most important of which was to get employed when other employment was not possible (“out of desperation”). Initially, the members performed exceptionally, earning awards such as crew member of the month. In 1998, the group claim that they were promised bonus pay, which they eagerly looked forward to. However, the promised bonus was never given out, and when approached management allegedly reneged and refused to pay it. This incident apparently triggered what appeared to be a long-standing rift between the employees and McDonalds Glasgow. The employees decided to form a trade union, and with that aim collected the signatures of 40 staff out of the total of 60. The move did not prosper, though, mainly due to the high turnover that many of the signatories either left for greener pastures or were fired. However, a group of 15 stalwarts working underground continued to make trouble for the company when, in January 1999, they pelted the night shift with a barrage of snowballs. But the group realised that just fighting one store was not enough; they began to organise with other employees in other McDonalds stores, mainly through email and through a satirical magazine they named McSues. The group admits to contacting employees in other McSues stores and using both persuasion and threats for them to organise MWR at their stores. In October 12, 2000, MWR went public and McSues became an instant success, printing 2000 copies and setting up an email workers may contact for copies. The circulation exceeded 2000 copies, though, as members photocopied their own copies and sent them to as far as Sweden and New Zealand. The magazine was so popular, Greek and Czech versions were circulated. But other than satire, the magazine became a means for other McDonalds employees, whether MWR members of not, to write in questions and requests for advice about varied things, but mainly about work. Aside from McSues, the “loose network” came out with other literature such as the Other activities that the group had undertaken was to liaison and coordinate with other domestic and foreign labour organisations and non-government organisations whose aims were to advance social justice and the interest of the working class. They also organised a yearly event they called the Worldwide Anti-McDonald’s Day, set every October 16th which is also the UN World Food Day. The day is set to hold a protest against the proliferation of fast foods (“junk food”), the unethical targeting of children, exploitation of workers, animal cruelty, damage to the environment and “the global domination of corporations over our lives” (The NYC Independent Media Center, 2005). 4. Discussion 4.1 Introduction The foregoing section highlighted some intense employee reactions that appear to pervade McDonalds stores worldwide. These stories shall be analysed against the theoretical paradigms governing human resources management which have been articulated within the past century, with the aim of providing recommendations for the solution of the problem presented. Four of the most important theories shall provide the framework for discussion: Maslow’s Hierarchy of Needs Theory, Herzberg’s Model, Vroom’s Expectancy Theory, and Adams’ Equity Theory. 4.2 Maslow’s Hierarchy of Needs It will be recalled that as discussed in the preceding literature review, Maslow’s theory says that the fulfilment of human needs follow a hierarchy, beginning with the physiological and culminating in the psychological, the highest of which is self-actualization. In the case of the McDonalds scenario, it was mentioned that McDonald’s workers usually accepted jobs in the stores out of “desperation”. In the context of the present financial crisis, it means that those who seek employment at McDonalds could not find a job anywhere else. They thus stay with the company in order to meet their most basic, physiological needs. Had they anywhere else to go, as signified by the high turnover rate, the employees would opt to go elsewhere. This is not very flattering for the company. To be sure, they would be losing the best of their employees first as the latter seek better jobs elsewhere. Also, the company is unable to maximally benefit from the expenses in training its people, since they leave at the first chance they get. Ideally, management should be able to offer the employee a reason to stay and pursue his career path with the company. This is nearly impossible for McDonalds, with its regimented work processes that tend to diminish, rather than enhance, the psychological gratification that the employee should feel at his job. 4.3 Herzberg’s Two Factor Model According to the Herzberg model, the two factors material to attaining success – the motivators and the hygiene factors – must both be addressed by the company in order for the employees to be continuously motivated. In this case of McDonalds, it appears that both factors are deficient. The level of pay, a hygiene factor, is considered by employees to be low, mentioned in some of MWR’s reports to be at a level of $4 per hour. Management concern for employee welfare, hygiene factor, is also missing as employees feel that they are being exploited by their superiors (for instance, the fact that employees need to ask permission to take a bathroom break). This is telling in the incident involving Mr. Takano where employee overtime is not paid out even if deserved. It is also apparent where store managers manipulated employee times in order to save on manpower costs, despite the fact that the employee had put in the needed hours. Many of the other alleged actions of management in dealing with the employee are likewise indicative of the absence of certain hygiene factors, and where hygiene factors are absent, dissatisfaction occurs. This is clearly the explanation why employees felt driven to network and undertake organised activities, with the aim of airing their grievances in the public domain. The extreme dissatisfaction among McDonalds employees is evident in their released statements and the court cases filed against the employer. 4.4 Vroom’s Expectancy Theory According to the expectancy theory, when an employee renders good performance as expected of him, he naturally has expectations of certain rewards or compensations commensurate to the effort he has exerted. Other authors call this the psychological contract, where employer and employee has a set of expectations of each other in return for the benefits the other has derived. In the McDonald’s case, the origin of the MWR stated that the founding members of the movement all started out as positively motivated and achievers in the context of their jobs. They even merited the crew member of the month award. In return, they were expecting the promised bonus, a promised on which management reneged. When the employees did not receive their expected reward, an expectation management was aware of and even initially consented to, it is not surprising that employees would react negatively and dramatically to the incident. In this case, the exerted effort did not yield the expected benefit, and the employees became extremely demotivated. 4.5 Adam’s Equity Theory Adam’s equity theory states that what effort employees put into their jobs and what they receive for it are compared and, when found inequitable, is cause for their demotivation at work. Samples of this situation abound in this case, from the issue of pay to that of bonuses and overtime pay. It is a sad proposition that the employee has to resort to litigation to pursue satisfaction of his claims against the company (the case of Hiroshi Takano), instead of the company voluntarily extending to its employees that which is their rightful due. 4.6 Synthesis In the case, all four motivation theories provide explanation of a piece of the puzzle that makes up the McDonald’s human resources dilemma. Because of the presence of demotivating conditions or the absence of motivating conditions, it is little wonder that employees have taken to the militant stance and a very public dirty linen washing. This discussion finds relevance of all four theories on the situations prevailing in McDonalds, and they should provide solutions to the problems identified. 5. Conclusion McDonald’s restaurants have become a permanent fixture in our daily lives, whatever part of the civilized world we live in. Our children have found a fascination for the cheerful clown that stands as mascot for the company, and a fondness for the toys that come with the “Happy Meals” dispensed by the smiling staff behind the clean, aluminium counters. Everything about McDonald’s appears sunny and cheerful and everyone seems happy – everyone, it seems except its store personnel. News accounts and published legal decisions culled in this study provide factual accounts of the human resources policies and practices employed by McDonalds. Many of these policies and practices have proven to be detrimental to the manner in which the company’s employees perceive and relate to their employer; these issues include low pay, regimented job routines, dehumanizing controls, erosion of personal prerogatives, and dishonesty (i.e., in manipulating reported hours worked and reneging on promised bonuses). The perceived aggregated transgressions of the company have compelled employees to engage in militant and vile information attack against the company, and at times outright and palpable action intended to disrupt business and inflict losses upon the company. The situation presents a dilemma which has to be resolved if the company is to improve its performance and its image, but most especially, its relationship with its employees. In the literature review, four motivation theories were chosen to provide the framework for discussion for the case; these are the theories by Maslow, Herzberg, Vroom and Adams. In the discussion it was established that: as per Maslow’s hierarchy of needs, the human resources policies and practices of McDonald’s is deficient in providing for the employee’s physiological needs and utterly void of features to satisfy their psychological needs. “McDonaldisation” of the tasks required erodes the employees’ self esteem and provides no channel for them to achieve self-actualization. Under Herzberg’s two factor theory, McDonald’s practices do not adequately meet the hygiene factor requirements, much less motivators, that are usually evident in modern day employment. This creates a strong sense of dissatisfaction and demotivation made evident by activities of the MWR. Under Vroom’s expectancy theory, management has fallen short of meeting the expectations of its employees, expectations which, at least in the beginning and maybe even thereafter, were fostered by the company itself. Finally, under the equity theory, it is evident that the policies and practices of McDonalds were inequitable to the employees’ services, not only based on the employees’ performance, but also on contemporary standards as observed in other businesses. It is necessary for management to address these inadequacies in its human resources management. In other industries, this would be undertaken by pursuing a job analysis and design that leads to employee empowerment and engagement rather than mere robotic execution of mandatory regimens. At the outset, however, these measures are incompatible with McDonald’s strategy of strict standardization of cost and quality around the world. Difficult though the problem may be, there is a possibility of working out a happy compromise that could allow for humanisation of the procedures without sacrificing quality. This aside, it is also important for central management to realise that their store managers should be impressed with the importance of mutual trust and respect among them and their subordinates. A promise of a bonus should be kept, time records should not be tampered with, and employees should be trusted enough to go to the bathroom without the need to ask permission, which is utterly degrading among adults. It seems that what is lacking in McDonald’s is not a matter of logistics or capabilities, but it is possible that the strict regimen has fostered a culture that is shallow, mechanical and unsympathetic, at least at the store level. References Boge, D M 2008 Storytelling Organizations. Sage Publications, London. Datamonitor 2009 MacDonald’s: capitalizing on the downturn with an even greater presence. MarketWatch: Global Round-up, March 2009, p. 80. “Hamburglar” 2005 Worldwide Anti-McDonald’s Day: Oct 16th. The New York City Independent Media Center. 12 October 2005. Accessed 12 December 2009 from http://nyc.indymedia.org/en/2005/10/58494.html Heher, A M 2009 McDonald’s sales take hit from US Joblessness. Associated Press, 8 Dec. Accessed 12 December 2009 from http://finance.yahoo.com/news/McDonalds-sales-take-hit-from-apf-3524063237.html?x=0 MacDougall, W 2003 McDonald’s worker resistance: shaking the golden arches. Counterpunch, 24 January. Accessed 12 December 2009 from http://www.theglobalreport.org/issues/211/labor.html McDonald’s Corporate Website. Accessed 12 December 2009 from http://www.mcdonalds.com/corporate/index.html ____. McDonald’s Food Chain. 2002 ICMR Center for Management Research. Accessed 12 December 2009 from http://www.icmrindia.org/casestudies/catalogue/Operations/OPER001.htm MWR Aims and Principles, 2002. Accessed 12 December 2009 from http://www.mwr.org.uk/aandp.htm Royle, T 2000 Working for McDonald’s in Europe: The Unequal Struggle? New York: Routledge. Scholosser, E 2002 Fast food nation: The dark side of all–American meal (pp. 67 – 71). New York: Houghton Mifflin. Read More