Term Paper: Mcdonald's Corporation Analysis Existing Conditions

Pages: 8 (2799 words)  ·  Bibliography Sources: 1+  ·  Level: College Senior  ·  Topic: Business - Management  ·  Buy This Paper

SAMPLE EXCERPT:

[. . .] McDonald has a policy of hiring young workers between the ages of 16-22 for their service operations. Many workers in this age group use a McDonald job as a means to earn extra spending money and often do not care about the long-term impact of the low wages provided. They are also move on due to school demands, the satisfaction of the financial need or simply because they no longer need to work for the money.

Balancing the needs of worker compensation and restaurant profit by the site manager. Every McDonald restaurant is actively managed by "numbers." Simply put, if a location does not consistently generate revenue, the local management of the restaurant will be changed or a franchise transferred. As a consequence, every supervisors and managers at location are constantly looking for ways and means to control cost. Labor cost is one of the only variables that is completely within their control and they often resort to manipulation of this variable to obtain their profit margins.

Training of the lower-tier workforce at site and managers and supervisors at the HQ. Every worker at McDonald is trained -- in McDonald's way of doing things. However, the training differs drastically from low tier worker to the managers and supervisors of McDonald Corporation. While many managers often rise through the ranks and are selected because of their abilities and skills, the low-level worker is often treated as "just a means to an end." This attitude has affected the morale of the worker and consequently the productivity.

Benefits and perks provided to the employee. McDonald used to provide benefits and perks for all employees in the past. Recently however, the need to generate revenue and the slowing down of the growth and profits of the corporation has forced management to reduce many of the incentives provided to the workers.

A random search on the Internet revealed that there are too many dedicated websites citing injustices that McDonald workers face in the line of duty. Some range from overworking of the employees to serious injuries while using store equipment. As a result, it is fair to assume that worker morale and performance is at an all time low.

Recommendations

When management knows and understands both their strengths and their weakness their effectiveness as managers is greater with the workforce. Common courtesies, like being polite, decent and having good manners with the workforce are important especially at the service level where the manager and the employee are both in contact with the public. It is important that the corporation set an example in good humane behavior for its employees. (McDonald's, 2004c)

Managers are under tremendous stress to show profits and revenues for the company constantly. While this strategy has help McDonald become the leader in the fast food industry, it should also provide sufficient incentive for managers who are able to reduce turnovers and improve morale and performance of existing workers. It is critical to note that the idea stated earlier is a cyclic process. In order to improve motivation, compensation, bonuses or perks might be desired. As compensation increases within the restaurant, the profitability of the operation correspondingly decreases. The trick however, would be to reduce turnover and thereby reduce the hidden cost of new worker training and the learning curve that might be experienced by a new worker.

Local managers can also be trained in providing workers with career help for success within the organization. At present, McDonald offers tuition coverage for needed and deserving employees within the organization in order for them to better themselves. Helping employees to move through the ranks of the organization can also be used in lieu of huge wage increments in the short-term. (McDonald's, 2004a)

Time line for Change and Financial cost

Any change implemented within an organization cost time and money to implement and undertake. It is proposed that in order to test the effectiveness of HR management by using local managers and supervisors a pilot project of 30 restaurants in different location in the U.S. be selected. The managers of these locations will be provided additional training in worker motivation and guidance counseling. In addition, these managers will also be provided information on career development for workers within the organization and the increasing of skill level and capability of the worker.

Managers will also be provided with an incentive as well. Managers who can increase performance, morale and dedication of the workforce will also managing the profit margin, not by aggressive cutting back of hours or wages, but by reducing or at best controlling turnovers within the location will also be allowed a chance for promotion and growth within the organization. This test will be run for 12 months. The cost of training for all managers at the company headquarters will be the initial cost. A dedicated management representative will be assigned to monitor the performance and productivity along with other metrics of wage fluctuations, turnovers, employee development and morale of worker.

Periodic surveys and data collection directly from workers of the 30 locations will be collected. Data analysis and trend evaluations will be performed. At the end of 12 months the location that is able to work the best practices will be selected as a model and analyzed for key factors. The other 29 will also be analyses with respect to the best and the average performers.

Conclusion

All HR policies are generally the result of testing out a number of plans and strategies. Every plan might not be perfect. It is important that management be wary of making the employee skeptical by constantly changing HR policies and agendas. Management will have to make adjustments and changes if it wishes to implement the new policy throughout the organization. Tweaking and monitoring of the policy at all times can help the policy succeed overall.

Bibliography

Barboza, David. (2001, October 14). When Golden Arches Are Too Red, White and Blue. NY Times. http://www.mindfully.org/WTO/McDonalds-Red-White-Blue.htm

Barrett, Larry, & Gallagher, Sean. (2003). McBusted. Baseline. Retrieved June 14, 2004, from the World Wide Web: http://www.baselinemag.com/print_article/0,3668,a=44191,00.asp

Curry, Andrew. (2003, February 24 - March 3). Why We Work Author. U.S. News and World Report

Fleck, Fiona. (2004, Apr 24, 2004). World Business Briefing Europe: Switzerland: McDonald's Reprimanded. New York Times. (East Coast), pp. C3

Grossman, Robert J. (2000). Measuring Up. HR Magazine, 45, 1, pg. 28

HRGUIDE.com. (2003). HR Guide to the Internet: Compensation: Outline and Definitions. HRGUIDE.com. Retrieved June 15, 2004, from the World Wide Web: http://www.hr-guide.com/data/G400.htm

IDS. (2001). The impact of the National Minimum Wage in 2001. Editorial from IDS Report 844. Retrieved June 15, 2004, from the World Wide Web: http://www.incomesdata.co.uk/report/view844.htm

McDonald's. (2004a). Employment Policies. Retrieved June 15, 2004, from the World Wide Web: http://www.mcdonalds.co.uk/pages/companyinfo/employmentpolicies.html

McDonald's. (2004b). McDonald's Corporation. Retrieved March 21, 2004, from the World Wide Web: http://164.109.33.187/corp/career/busfunction/accounting/organization_structure.html

McDonald's. (2004c). McDonald's Corporation Corporate Governance. Standards of Business Conduct for Employees. Retrieved June 15, 2004, from the World Wide Web: http://www.mcdonalds.com/corp/invest/gov/standards_of_business.html

McDonald's. (2004d). McDonald's Restaurant Management Careers. Retrieved June 15, 2004, from the World Wide Web: http://www.mcdonalds.com/usa/work/manage.html

McDonald's-Press. (2003). McDonald's Announces Key Senior Management Changes. McDonald's Corporation. Retrieved June 15, 2004, from the World Wide Web: http://www.mcdonalds.com/corp/news/corppr/cpr11042003b.html

Murray, Kyle. (2003). The automatic escalator: Stepping up plan participation. Journal of Pension Planning and Compliance., 29, 3, 80

Phillips, Ken. (2001). Markets in the Firm. Institute of Economic Affairs. Retrieved June 15, 2004, from the World Wide Web: http://www.ipa.org.au/Media/kpiea010901.html

Royle, Tony. (2000). The problems of trade union organisation in the European fast-food industry: The case of McDonald's. Management Research News., 23, 2-4, pg. 79

TICL. (1987). McSTART. Transnationals Information Centre London. Retrieved June 14, 2004, from the World Wide Web: http://www.mcspotlight.org/media/reports/trans.html [END OF PREVIEW]

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