Human Resource Management at McDonalds - Essay Example

HUMAN RESOURCE MANAGEMENT AT MC DONALD'S A talent searcher in a popular talent search show in television once told a contestant that hewill "never be worth more than a job at McDonald's". A very derogatory statement indeed, considering that current statistics show that there are about 1.6 million people employed as various types of service crew in McDonald's restaurants around the world. Despite this, jobs in fastfood restaurants such as McDonald's are often viewed as only for the dim-witted and underqualified ("HR challenges... I'm lovin' It, 2005"). David, Fairhurst, McDonald UK's vice-president for people says that this particular view of McDonald employees is false, stating that people who work for them come over with some sort of 'job' mentality. Much of the time, employees are motivated by their working environment and thus some of these employees rise to top positions with in the company. Fairhurst claims that about 80% of service crews advance to store managerial positions, serving the company for 10 years on the average ("HR challenges... I'm lovin' It, 2005"). It is a fact that McDonald's is one of the top fastfood chains in the world, serving 50 million people daily in their 30,000 restaurants spread in over 119 countries worldwide. McDonald's actually started small by a certain Czech-American entrepreneur from the town of Plzen named Raymond Albert Kroc. Kroc was originally a salesman who sold five-spindled milk shakers called "Multi-mixers". His interest in providing fastfood to people was aroused when he heard of a hamburger stand in California that operates 8 Multi-mixers at a time in 1954 ("Mc Donald's History, n.d.") Kroc then met the McDonald brothers Dick and Mac, to which he immediately proposed the concept of a chain of fastfood restaurants named after themselves. Through the Kroc and the McDonald's brother's collaboration, the first McDonald's restaurant opened in Des Plaines in Illinois ("Fascinating Mc Facts, 2005"). Kroc then propagated the McDonald's chain through franchising, in which he is considered as one of the proponents of the system. Currently, 73% of McDonald's restaurants are owned by about 5,400 independent franchisees all over the world. McDonald's is also considered as a pioneer of specific menus and systems that cater to their specific clients ("Mc Donald's Corporate Responsibility Report"). One good thing about the franchise system allows the franchisees to handle restaurant operations and the workforce under them if they are trained and guided well. At present, McDonald's has a 1.6 million strong workforce, with only 398,000 people hired directly by the company. While each restaurant is responsible for individual policies they may have on bringing in, compensating and rewarding their employees, franchisees or independent owners, are required to promote a general set of "people practices" espoused by the company. This is checked through regular assessment of restaurant operations and recommendations by corporate specialists on training and research ("Mc Donald's Corporate Responsibility Report 2004 (Supplement)") 60% of McDonald's employees (or "crew" as they are commonly called) is 16-21 years old. The average crew member handles such tasks as cleaning the floors, waiting tables, cooking etc., garnering free meals and other benefits while earning by the hour. For most of the crew, employment at McDonald's is their first step into the "real world" and although some may leave the company for another job some stay in the company at an average of 1.6 years ("Tootelian, n.d.") This employee loyalty is attributed to the company's excellent Human Resources training and policies which specifically targets the development of basic workplace skills and attitudes among its employees. As the crew gains experience, they are given opportunities to be assimilated into the company to handle leadership and management roles while some may move on to other companies. Company personalities such as Mc Donald's President and CEO Charlie Bell, Chief Restaurant Operations Officer, Claire Babrowski, and McDonald's Ventures Managing Director, Mats Lederhausen were all former crew members. Add that to the fact that about 1,000 independent restaurant owners today were former McDonald's employees ("Corporate Responsibility Report 2004"). McDonald's employment system also boasts of having a diversity program that gives job opportunities to people who belong to minority and cultural groups like Afro-Americans, the disabled, Asians etc, as well as giving special considerations for gays and lesbians among its roster. This is due to the fact that McDonald's is a member of the US Business Leadership Network which advocates the employment of people belonging to such groups ("Corporate Responsibility Report 2004"). All McDonald's restaurants employ a rigid code of ethics, training classes and a Management Development Program which serves as a base for their ethical, business and training standards. For new employees, an orientation program forms the basis of their training efforts. A rookie crew member is trained by the experienced crew members themselves along with the help of various training materials such as trainer's guides and employee handbooks. Each rookie must learn the basics of safety and security in the workplace before moving on to cleanliness, food safety, customer hospitality. The next step is closely observing aspects or levels of production, which may require that he be assigned to different restaurant stations. Lastly, a rookie is also trained on quality customer hospitality and coworker relations who will enhance their service skills even further ("Mc Donald's Training, n.d."). Rookies and seasoned employees that show leadership abilities are further trained in in-house management programs that focus on people management. Aside from the usual training on supervision, leadership, and shift management training, future McDonald's restaurant managers are though how to establish a positive work environment which offers respect and appreciation for the people around them while finding ways of enhancing crew and customer satisfaction. More often than not, crew members who seek managerial positions succeed if they work hard enough. A crew member or team leader may become a potential manager trainee (MT) who will take on the duty of enforcing company procedures and policies in preparation for managing shifts in a McDonald's branch. Potential MT's must them develop a keen sense for human relations as he or she must be maintain an open line of communication between the staff and would be required to follow-up their advancement. At this point, the potential manager arrives at the crossroads of his or her career. Jus how far he or she will advance into the McDonald's hierarchy is entirely up to him or her ("Mc Donald's Career Paths, n.d."). A Manager Trainee I advance into a Second Manager Assistant, which has the primary duty of ensuring Quality, Service, Cleanliness and Value (QSC&V) upon their crew, products and equipment assigned on their shifts. The Second Manager Assistant is also given crew members under his or her mentorship. The Second Manager Assistant also handles the paperwork as well the control of food components, labor, waste and cash flow of the branch. After all this, a Second Manager Assistant can then aspire to become a First Assistant Manager ("Mc Donald's Career Paths, n.d."). A Second Manager Assistant can then be promoted in to a First Assistant Manager whose duty is to recruit future employees as well as retrain the experienced ones. A First Assistant manager is also responsible for maintaining the quality of McDonald's products and services as well as overall cleanliness and sanitation of the restaurant. A First Assistant Manager must also be an example for his crew, and must also inculcate leadership values and good behavior among his crew while keeping financial losses and costs down ("Mc Donald's Career Paths, n.d."). An employee's performance is judged and evaluated by the McDonald's HRD department from the time he or she becomes a Manager trainee up to First Assistant Manager. From there, the HRD evaluates who among the First Assistant Managers will become Restaurant Managers. This is not true for all outlets though, like in the case of California were company-owned restaurants follow a unique career path that requires the potential Manager to work on different restaurant "zones". A potential manager begins as a Front Counter Zone Manager which takes care of client hospitality directly within the restaurant. Afterwards, the potential manager may be assigned to be a Drive-thru zone manager who takes care of service, labor and profit. Finally, a potential manager becomes a Grill Zone Manager who is responsible for restaurant production. All these steps go along with pre-arranged training programs tuned for each zone ("Mc Donald's Career Paths, n.d.") Once an employee becomes a Restaurant Manger, he or she becomes responsible for the operations of the whole restaurant as well as overseeing the training of assistant managers. Restaurant Managers must also always ensure customer satisfaction as well as establishing restaurant standard operating procedures like security, food safety and maintenance. Apart from these, he or she must monitor and accomplish different procedures in the restaurant-among these the pay, incentives and personnel records. The restaurant manager is also responsible for forecasting profit and keeping losses to a minimum ("Mc Donald's Career Paths, n.d."). Restaurant Mangers can then advance further by becoming business or operations consultants whom restaurant managers and owner operators can rely upon for their store operations. A possible consultant position is Operations Supervisor that provides leadership and advice to his or her assigned branch. An Operations Supervisor not only sees through long-term sales and profit of his or her restaurant but also build rapport and good relations with Restaurant Managers and the Restaurant Leadership Team ("Mc Donald's Career Paths, n.d."). Another position along the consultancy line is that of Training Consultant which conduct training sessions to improve employee performance. Training Consultants also double as operations consultant and expert in accordance to McDonald's standards and training systems. Another position is the Business Consultant which assists a group of independent owners to improve their profits, QSC and other restrictions aimed for the development of their manpower. On the other hand, Human Resources Consultants are the ones that are responsible for administration of information necessary for solutions for recruitment problems specific to each restaurant ("Mc Donald's Career Paths, n.d."). McDonald's have developed a well-structured training and employee enhancement system through its years of existence. It also monitors the individual advancement of each of its employees, especially those that have the potential to lead. In fact, McDonald's have established its own Hamburger University in 1961 located in a 130,000 square-foot campus in Oak Brook, Illinois. The Hamburger University is dedicated to offering courses for aspiring restaurant managers, owner/operators and corporate employees. Hamburger University's curriculum has been changed from 2 years to 4 years and courses are taught simultaneously in up to 6 languages at any one time while course materials are available in 28 foreign languages. It is also the only restaurant organization that is accredited by the American Council on Education to bestow college credit recommendations of this type ("Mc Donald's Training, n.d."). Rigid ethical and business standards are emphasized on each and every employee of McDonald's. Mc Donald's has set clear-cut rules for proper ethics and conduct for its staff. Each employee is informed of their basic rights, what the company offers to protect them from harassment; that they are given equal opportunity while under the employ of Mc Donald's and are briefed on what constitutes conflict of interest; non-disclosure of classified company materials and financial records. Subsequently, everyone is also informed of the corresponding penalties and violations. Management then asks them if they have fully understood and if they are willing to abide by the said guidelines, prior to letting them start work in a Mc Donald's restaurant. The company expects their staff to act responsibly and hold themselves accountable for keeping an eye out for violations and subsequently reporting the perpetrators to their superiors. All reports are treated by the management as confidential, and the employee is granted full anonymity for his or her protection. If proven guilty, the employee will be meted out a warning; may be suspended or terminated, and depending on the gravity of the case, legal prosecution. ("Mc Donald's Corporate Responsibility Report 2004") McDonald's employee reward and incentive system is something that employees watch out for. The reward system is designed as such to attract new employees and retain the loyalties of seasoned employees. Employee incentives are mainly divided into four: base pay, incentive pay, long-term benefits and recognition programs ("Mc Donald's Benefits, n.d."). The base pay comes from financial reviews of internal and external market data garnered from last year's performance. It forms the bulk of an employee's compensation and is adjusted to be competitive with the base pays of other companies. McDonald's corporate, division and regional offices also employs a sort of "broadband" compensation system that allows flexible payment systems. Bonuses are also awarded especially when the sale of the restaurants goes well. Another scheme known as Target Incentive Plan or (TIP) creates a sort of connection between the performances of the company with employee performance. TIP basically rewards the employee if the company also performs well. Long term incentives on the other hand are rewarded to retain the loyalty of employees who did something exemplary for the company and have the potential of positively affecting McDonald's in the future. Meanwhile, recognition programs are given to recognize excellent performers. For example, the President's Award is awarded to the top 1% employees all over the world, while the Circle of Excellence award is given to the top international teams who have rendered excellent service in accordance to McDonald's vision ("Mc Donald's Careers-management, n.d."). McDonald's reward programs also help their employees in balancing their work and social lives through the alternative work approach. Arrangements can be made with the HRD of the corporate, division and regional offices to compress the work week for full-time employees as well as the arrangement of part-time schedules and schedule sharing of part-time employees. Restaurant Managers and all of Mc Donald's corporate employees enjoy the benefit of paid vacation leaves. The length of vacation time is based on the number of years the employee has worked. For other qualified regular employees, Mc Donald's gives nine paid vacation days. Part-time employees are also given paid leaves, but the number of days is subject to company discretion. Tenured Restaurant Managers also gain an 8-week sabbatical leave for every 10 years of full-time service rendered to the McDonald's company ("Mc Donald's Benefits, nd."). . Mc Donald's also supports the continuing education of its employees; and extends even child care or home and auto insurance aids. Some employees were assisted by the company in adoption cases ("Mc Donald's Benefits, nd."). McDonald's employees also enjoy full health and insurance benefits for themselves and their immediate family. The company provides them with medical plans that are with the First Health group of medical service providers. The medical plans include a prescription drug program feature and lifetime health benefits that include preventive care and once a year executive check-ups for employees and their beneficiaries which are usually immediate family members. The medical plan also covers other services such as well-baby care, child immunizations and inoculations whenever available. McDonald's also provide medical services for the visually impaired (which includes eye glasses and contact lenses replacement and surgery) and dental care. An employee may also ask the management to put aside a maximum of $5,600 from his pre-tax income for a health care spending account. ("Mc Donald's Benefits, n.d.") Mc Donald's also extends free short and long term disability coverage for all its employees. Short term disability readily compensates an employee who is rendered unable to work by injury for 10 or more days, consecutively. Long term disability, on the other hand, gives the injured employee up to 60% of his or her monthly basic pay. He is compensated for the entire duration of his disability. McDonald's also provides free basic life insurance equivalent to twice the employee's base salary. In case of death or serious injury caused by an accident the company gives out accidental death and dismemberment insurance which is worth twice the employee's basic pay. And, in the event of an accident when traveling for personal reasons, travel insurance, amounting to twice the basic monthly pay is also given. If the employee is sent on an official trip, an additional $100,000 or $200,000 is provided as business travel insurance on top of the regular travel accident coverage. ("Mc Donald's Benefits, nd.") With regards to the finances of its employees, Mc Donald's encourages them to invest and save by offering several money management programs. McSave, which is a special money market fund set up for McDonald's employees while MCDirect Shares allows them to invest and reinvest dividends in the company. There is also a Profit Sharing and Savings Plan which lets employees set aside up to half of their basic pay. The plan's 401(k) feature matches employee contributions with $3 for each $1 of the first 1% they set aside, and $1:$1 for the subsequent amounts they save up. ("Mc Donald's Benefits, n.d.") In conclusion, Mc Donald's human resource development policies provide its employees a challenging career and a nurturing work environment. Inspite the controversies and intrigues that befell the company in the last two years, Mc Donald's has managed to reinvent itself not only by reestablishing its reputation as a provider of nutritious and high-quality food by giving its consumers healthier meal options, but also placed the training and continuous development of its staff as the heart of its operations. Its people policies make each employee proud of holding a "Mc Job". The workplace is secure; their inputs and suggestions are welcome; they are aware of what the company expects from them, and what they get in return for their loyalty and service Moreover, the values and code of ethics Mc Donald's instills in its employees are invaluable and applicable to any job they may hold in the future. References "HR challenges... I'm lovin' it". Personnel Today Magazine 06 September 2005. Retrieved June 8, 2006 from http://wwwPersonnelToday.com "Mc Donald's History". McDonald's Corporation. Retrieved June 8, 2006 from www.mcdonalds.com/usa "Fascinating Mc Facts". Firsts-Fascinating Mc Facts (Microsoft Word document 4-7-05). McDonald's Corporation. Retrieved June 9, 2006 from www.mcdonalds.com/RMHC "Mc Donald's Corporate Responsibility Report 2004". McDonald's Corporation. Retrieved June 8, 2006 from www.mcdonalds.com "Mc Donald's Corporate Responsibility Report 2004 (Supplement)". Retrieved June 8, 2006 from www.mcdonalds.com Tootelian, Dennis H. 2006. The Mc Donald's Footprint. McDonald's Corporation. Retrieved June 9, 2006 from www.mcdonalds.com "Mc Donald's Training" 2006 McDonald's Corporation. Retrieved June 8, 2006 from www.mcdonalds.com/usa/work/m_careers/training "Mc Donald's Career Paths". 2006. McDonald's Corporation. Retrieved June 9, 2006 from www.mcdonalds.com/usa "Mc Donald's Benefits". 2006. McDonald's Corporation. Retrieved June 8, 2006 from www.mcdonalds.com/usa/work/career/employee_benefits "Mc Donald's Careers-management". 2006 McDonald's Corporation. 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