Human resources at McDonald's

It is often said that a business is only good as its staff – that without good staff the business is less likely to be successful. Human Resources Management is concerned with getting the best from staff and achieving an efficient and effective workforce – and concerned with ways of doing this. Human resources management covers the personal development and motivation of performance of individuals teams whole selection and department. It looks at how managers and supervisors can support staff to get the best out of them. It deals with day-to-day management issues as listed above.

I have selected McDonald’s as a large organisation to carry out my research to identify the factors that effect how McDonald’s plans it’s human resources on a short-term and a long-term basis, and how McDonald’s operates it’s recruitment and selection of staff procedures.

McDonald’s began in the USA in the USA in 1995 with one restaurant. McDonald’s is now the largest and fastest growing Quick Service restaurant in the world. From New York to Newcastle the Golden Arches have become a universal symbol for McDonald’s.

McDonalds opened its first store in the UK on 1974 in Woolwich, London and by the year 2000, it started to operate over 1000 restaurants.
The human resource management of McDonald’s covers a variety of activities. The term ‘human resource management’ has largely replaced the old-fashioned word ‘personnel’, which was used in the past.

Human resources management within McDonald’s
The key to human resources management is that it is seen as a strategic concern for McDonald’s. Rather than being simply a specialised function (as a personnel management used to be), it is a concern for all managers.
Managers across McDonald’s are being given responsibilities for selecting, motivating, developing and evaluating employees. All managers are therefore taking on human resource responsibilities. Employees are the most important resources in McDonald’s, particularly in creating a competitive edge.

The types of work covered by human resource management in McDonald’s are as follows:

1) A policy-making role – establishing major policies that cover the place and importance of people in McDonald’s.
2) A welfare role, concerned with looking after people at McDonald’s and their needs.
3) A supporting role, concerned with helping other managers to develop their work.
4) A bargaining and negotiating role, concerned with acting as an intermediary between different groups and interests
5) An administrative role, concerned with the payment of wages the supervision implementation of health and safety laws, etc.

Human resources planning
Like all businesses, McDonald’s require the assistance of staff to carry out the daily activities related to the nature of the organisation. The people are all-important members of staff to McDonald’s and fulfil a key role in its operation. McDonald’s would not be successful without of sophisticated technology, human beings are responsible for setting up correctly, pressing the right buttons and repairing it if it malfunctions.

Once inside McDonald’s staff performs various duties in connection with their roles and McDonald’s expects their work to be of a satisfactory standard, completed within a timescale and to be cost effective. Training is provided to help employees improve their levels of efficiency and this is rewarded with promotion or a bonus in recognition of their efforts.

None of this would occur if the managers had not selected potential workers in a careful way. The skills required can be identified and matched against the abilities of people looking for work. If McDonald’s takes on staffs who are unsuitable, it can cause a number of problems, e.g.
1) Poor productivity levels
2) Bad feeling among staff
3) Dissatisfaction about the job
4) High level of absenteeism
5) Customer complaints
6) Dismissal or resignation
7) The search for a replacement.

Human resources planning are concerned with getting the right people, using them well and developing them in order to meet McDonald’s goals. In order meet McDonald’s aims successfully, it is necessary to identify the means of using people in the most effective way and to identify any problems that are likely to occur (for example recruiting the best people) and then coming with solutions.
Demand for labour
McDonald’s demand for human resources is estimated by analysing its future plans and by estimating the levels of activity within McDonald’s.

Methods of forecasting demand
Management estimates
Managers are asked to forecast their staff requirements. They will do this on the basis of past, present and likely future requirements.
Work-study techniques
Work-study specialists works out how long various jobs take, using available machinery and equipment.
Provided they know what sales are likely to be, they calculate the numbers of employees required and the hours they will need to work.

Supply of labour
For McDonald’s to work out the supply of labour available it examines the numbers of people available to work, how long they can work for, their ability to do the required job, their productivity (output per head) and other factors.

The supply of labour is made up of two sources:
Internal supply
Statistics and information is collected on employees already within McDonald’s. This will cover the following main areas:
1) the number of employees in a particular job. This figure will give a broad overview of the number in McDonald’s who already possess certain broad categories of skills.
2) The skills available. It may be helpful to identify the current skills held by the labour force and to see how many of these are transferable.
3) Skills analysis. McDonald’s needs to be sure that it has the right number of people available at the right time but also with the right skills. McDonald’s, therefore, need to assess its present supply of skills across its workforces and to identify the sorts of skills it will require in the future.

A skills inventory of current employees will indicate those who have received recent training and those who will require training. It may be possible to meet the human resource requirements of McDonald’s by training and developing current staff rather than recruiting externally.

Performance results. McDonald’s gathers various information’s about the level of performance of various categories of current employees.
Promotional potential. An internal promotion changes the availability of existing resources. McDonald’s finds it useful to know how many employees have the skills and the aptitude for promotion to more demanding roles. In addition, McDonald’s finds useful to know how many employees have the potential, with suitable training for promotion.
Age distribution and length of service. McDonald’s looks at the people who work for the organisation. If there are too many older people then McDonald’s may be storing up problems for itself: there may be to many people who are soon going to retire, this leaving McDonald’s without sufficient experienced workers.
If there are too many young people, it may mean that people are not staying long enough to make their mark on McDonald’s. Perhaps promotion prospects are blocked in the organisation so that people are leaving.

Staff turnover
It is important; therefore, to be able to plan retirements within McDonald’s so that they keep a good balance between people who have been in the organisation for a long time and people who are bringing new ideas into the organisation. Staff turnover is analysed in order to help McDonald’s forecast future losses ant to identify the reasons people leave McDonald’s. A degree of staff turnover may be advantageous to McDonald’s as fresh staff can be recruited, promotion channels can be opened up and it may allow for natural wastage when McDonald’s is trying to reduce its workforce. Too high level of staff turnover may mean that there are problems in keeping staff levels up, changes may need to be made improve the environment e.g. working hours, nature of duties, less autocratic management or an improved recruitment method. It will then mean that there would be high additional costs of staff replacement and recruitment, additional training costs, and description to the quality of service.

It is possible to measure the rate at which people are leaving (or staying with) McDonald’s by using two simple methods:
1) Employee wastage rate
2) Labour stability rate.

They are calculated as follow:

Stability rate (%)

Number of employees with service of 1 year or more
     __________________________________________ X100
Number of employees employed a year ago


Turnover rate (%)

Number of employees leaving in 1 year
     _____________________________________     X100
     Average number of employees in same period

The external labour market
The external labour market for McDonald’s is made up of potential employees, locally, regionally. There are ranges of factors that affect the size and nature of these labour markets, e.g.
Changes in the age distribution of the UK population has an affect on the human resource planning of McDonald’s.

Competition for labour

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Competition for labour

The overall level of economy activity
Educational and training opportunities
The government policies.
Local employment trends and local skill shortages do not have an impact on McDonald’s because McDonald’s does not really look for skills when recruiting. They train them with the skills, which they think has got the ability of those skills.

Sickness and absent rates
In addition to labour turnover figures, departmental managers are asked to record sickness and absence rates. These are important for McDonald’s to determine the difference between an employee who is genuinely sick and unable to perform his/her duties and an employee who deliberately takes time off without a genuine reason.
Both of these courses of action by a member of staff means that the manager may have to re-allocate work in order to meet customer satisfaction.

Genuine sickness is unavoidable in McDonald’s and can cope with small amounts from time to time. McDonald’s has a system in place to record the hours/days sickness for each employee. There are three main reasons for this:
The total number of days must not exceed those allocated under the terms of the contract and can occur in small batches during the year, e.g. flu, migraine, stomach upset.
Long-term illness, such as broken leg or a serious operation, may require the work to be covered by a temporary replacement.
Sickness pay is calculated according to government regulations and a doctor’s certificate is needed if the absence carries on for a long time.

A simple form is used to record the sickness period these is sent to the human resources department to be added to the employee’s personal file. A spreadsheet is used if a central recording system is in operation and this allows access by several sections of McDonald’s, each of who need this data for further actions.
These are likely to be:
The human resources department
The store manager
The wages/salaries department.

Staff absent can be calculated using the formula:

Absence rate (%)

Number of employee hours lost in period
__________________________________ X100
Total possible employee hours in period

In what circumstances is an employee eligible for Statutory Sick Pay (SSP) in McDonald’s?
If an employee is absent due to sickness or injury for four or more consecutive days may be eligible for SSP.

The rules are:
1. They must notify a Manager that they are ill before their scheduled shift giving as much notice as possible.
2. The minimum period of illness that qualifies for SSP is four consecutive days. This can include weekends and public holidays.
3. From the fourth day absence due to sickness, SSP may be payable for scheduled days if their average weekly earnings over the previous eight weeks exceeded the minimum requirements.
4. When they return to work after a period of sickness of between four and seven days, they must provide a ‘Self Certificate’, which is available from their Doctors or DSS Office.
5. If their illness lasts for more than seven days, they must obtain a Doctor’s Certificate stating the nature of the illness and ensure that the manager receives it. They also need to complete a ‘self certificate’, which is also sent to the manager.

Statutory Sick Pay entitlement is as follows:
1. Payment rate requirements are reviewed annually by the DSS, and current rates can be obtained from the restaurant /General Manager or Payroll Department.
2. The daily rate of SSP is calculated by the Payroll Department, and is dependent on the number of days they are scheduled per week.

In what circumstances are employees not eligible for SSP?
They will be excluded from SSP if they:
Are over the minimum state pension age on the first day of sickness
Were taken on for a specified temporary period of no more than three months (unless the contract is extended to more than three months)
Have average weekly gross earnings less than the lower weekly earning
Limit for National Insurance contribution liability
Go sick within 57 days of a previous claim for one of these state benefits:
- sickness benefit
- invalidity pension
- severe disablement allowance
- maternity allowance
have not worked after being issued with contract of employment
go sick during a stoppage of work at their place of employment due to a trade dispute, unless they have not taken part in he trade dispute and have no direct interest in it
are off sick during the time starting 6 weeks before they expected week of confinement and ending 12 weeks after
have already been paid for 28 weeks SSP in any single period of incapacity for work
re sick while abroad outside the EEC
are in legal custody

Age, skills and training
These three areas are closely linked and form another part of the recording procedures carried out by human resources staff.

McDonald’s has a range of employees who have worked for different lengths of time and who have different levels of skills and training. The human resources planner seeks to have a balanced of new people entering McDonald’s in order to cover those who are leaving. The human resources planner also wants to make sure that skill levels are rising within McDonald’s, and that training programmes are devised to make sure people have the skills to meet McDonald’s job requirements.

It is more useful for McDonald’s to have a workforce that contains a good spread of age bands. More mature employees tend to have a strong sense of loyalty to McDonald’s but may cause a problem if they all retire at the same time.

Succession planning
This is an important aspect of human resource planning and there are several reasons for it in the development outline of McDonald’s.

First, there is the issue of continuity of performance from the department as well as McDonald’s itself. Any reduction in performance of key staff will affect the quality of service produced and, ultimately, the reputation of McDonald’s will suffer. Once damaged in this way, it is difficult to recoup customer loyalty and so attention is paid to this part of the operation.
Secondly, if McDonald’s suddenly loses several key staff (resignation, retirement, or death), it would cause considerable damage to the internal functions of the particular department.
Thirdly, when authorised absences from work are been taken (holiday) McDonald’s makes sure that they have someone in place.

McDonald’s has assistant managers to step into the store mangers role when he is away to fulfil the duties his/her duties.

Recruitment and selection
The purpose of recruitment is to buy in and retain the best available human resources to meet McDonald’s needs. It is therefore important to be clear about:
What McDonald’s entails
What qualities are required to do the job
What incentives are required to attract and motivate the right employee?

Selection involves procedures to identify the most appropriate candidate to fill each post. An effective procedure will therefore take into consideration the following:
Keeping the cost of selection down
Making sure that required skills and qualities have been specified and developing a process for identifying them in candidates
Making sure that the candidate selected will want the job, and will stay with McDonald’s.

McDonald’s recruit through out the year. They recruit internally and externally; they mostly recruit their managers and Assistant managers internally rather then externally, because its easier and less training is needed because the candidate already knows the job. Approximately 50% of McDonald’s salaried managers are promoted from within McDonald’s.

What factors does McDonald’s go through when recruiting?
During external recruitment, McDonald’s follows a sheet that is produced by the Head Office, making sure that:
We are going through right procedures
We are working at the right legal side, i.e. asylum seekers.

How does McDonald’s advertise for vacancies?
McDonald’s places its adverts for vacancies on a notice board in the restaurant, on the window of the restaurant, at the local job centre. But mostly its people coming into McDonald’s and asking for vacancies, not much advertising is needed.

What type of skills do you look for when recruiting staff?
McDonald’s does not look for skills; we look more at the personality. We train them with skills that are needed. But obviously, if a person can’t clean toilets, or is shy and not outgoing then they’re not the right candidates for McDonald’s.

As part of the interview, do you set tasks for the candidates?
We ask if they would do certain tasks. We usually give them a task and see how they would deal with it.

Does McDonald’s assess candidates against job description?
Yes, we have to.

How does McDonald’s ensure that they treat all job applicants equally?
McDonald’s strives to promote a working environment, which is free from unlawful harassment, bullying and discrimination. McDonald’s regard’s all of its employees as members of a team where everyone’s opinion is valued, everyone is regarded as equal in status and everyone must always be treated with fairness and respect.
McDonald’s Diversity Policy exists to ensure that no job applicant or existing employee is treated less favourably on the grounds of their gender, marital status, disability, race, colour, nationality or ethnic origin and that no-one is disadvantaged by conditions, requirements or practices which cannot be shown to be just and fair.

The way we recruit and work should ensure that employees are selected, promoted and treated according to their ability and tat everyone has an equal opportunity to receive training and development.

Discrimination
Discrimination is treating a person less favourably because of gender; pregnancy, marital status, disability, ethnic origin or race can be either Direct or Indirect. Direct discrimination occurs when a person is treated less favourably for a reason unconnected with their ability to perform either the job they are doing or the job they are being considered for.
Indirect discrimination, occurs where an unjustifiable requirement or condition is applied which, although in theory applies to everyone, in practice is more difficult for one particular group to meet or fulfil.

Examples of Direct Discrimination include:
Making decisions about whether someone should be offered, or not offered, a job because of their ethnic background
Making decisions about who should, or should not be promoted or trained because of their disability
Dismissing an employee because she is pregnant or withdrawing a job offer due to the applicant’s pregnancy.

Examples of Indirect Discrimination include:
Segregating employees onto different work stations or shifts
Setting standards which some employees are less likely to be able to achieve because of their gender, race, disability etc.

Harassment
Harassment is a form of discrimination and is behaviour which the recipient finds unacceptable and welcomed. Sexual harassment may be direct at both men and women and means any unwelcome and/or unwanted comments, looks, actions, jokes, innuendoes, suggestions or physical contact of a sexual nature that upsets or offends the recipient.
Racial harassment is any unwelcome and/or unwanted comments or behaviours, such as racial mockery; innuendo, abusive language or derogatory remarks based on a person’s race, colour or ethnic origin.

Examples of Sexual Harassment include:
Insensitive jokes, innuendo or pranks
Lewd comments about appearance
Unnecessary body contact
Threatened or actual sexual violence

Examples of Racial Harassment include:
Racial name calling
Abusive language, mockery and racist jokes
Display or circulation of racially offensive material
Exclusion from normal workplace conversation or social events, i.e., being ‘frozen out’.

Bullying is the intentional intimidation of someone through the misuse of power or position which leaves the person feeling upset, undermines their self-confidence and causes harmful stress.

Examples of Bullying include:
Verbal abuse – shouting, swearing or threatening a person
Physical abuse – shaking, pushing or blocking someone’s way
Excessive supervision or the misuse of power

All employees have the responsibility to challenge questionable behaviour and practices.
Specific responsibility for equality falls upon the managers, to manage their teams in a manner, which creates a working environment where differences in individuals are valued and respected.

What does the employee do if they have a complaint?
If they think that they are being harassed, bullied or discriminated against they should follow the following steps:
Ask the person to stop
Ask for help
Speak to a manager

All complaints will be treated seriously and confidentially whilst an investigation is conducted. No employee bringing a complaint will suffer any detriment as a result of having brought a complaint. Any employee who feels he or she has experienced discrimination, harassment or bullying may be accompanied by a company employee of their choice at any stage of the procedure.
Until an investigation has been completed, there will be no assumption made that the alleged harasser is guilty of the allegations and he/she will be treated fairly and with confidentiality. Appropriate disciplinary action will be taken against employees whose allegation is found to have been malicious.

If the complainant is not satisfied with the way that the complaint has been handled, or with the outcome of the investigation, he/she may ask for it to be reconsidered by the regional manager, whose decision will be final.
The Human Resources department will regularly monitor and review the policy and will take such corrective action as may be necessary to ensure it is being complied with.

Training and Development
What training does the employees receive?
At McDonald’s we believe that training is the foundation of our success. It is an ongoing process that involves all McDonald’s employees – it’s everyone’s job, every day.

The employee will receive induction training followed by a structured development programme relevant to their position. To complete their initial training, they must successfully pass one Observation Check List (OCL) in each area.
Where possible, we aim to integrate learning with workplace. An ongoing programme of training evaluation enables us to keep training up to date and relevant to the needs of the business.

McDonald’s do have a training programme.
Initial Training is the development of employees who are competent to work on and have basic job knowledge of each station – the ‘what’ and ‘how’ of the job. Ongoing training provides a more advanced level of job knowledge and competency skills training – the why of the job.

The employees have a probationary period.
The first 21 days of employment with McDonald’s is the probationary period. During the probationary period the employee’s performance will be evaluated in the areas of work standards, personal attributes, teamwork, customer focus, hygiene and their initiatives.

To successfully complete their probationary period they must be satisfactory in both of the hygiene categories on their appraisal. They must also achieve a competency rating of ‘satisfactory’ in ten other areas, giving a total of 12.
If they do not meet the required standards of performance and/or conduct, their employment can be, terminated at any time during their probationary period.

Performance Management
All members of staff take a keen interest in the methods used by McDonald’s to reward them for loyalty and hard work. It is generally recognised that the majority of people go to work for a range of reasons but predominant among these is the need to earn a living wage.
Employers are conscious of the fact that the overall remuneration package for each employee adds up to an exceeding high proportion of any money earned from the sale of goods or services. Because customers demand ever increasing standards of performance plus lower prices, this always places pressure on McDonald’s to search for reductions in operating costs.

The best way to achieve ‘value for money’ is to monitor the performance levels of staff and aim to reduce wasteful activities. One of the features that McDonalds monitor are the quality of work being produced and the efficiency levels within departments. These are important in the point of view that customers will not return to McDonald’s for repeat purchase if staff are inefficient, because too many complaints and uncompleted tasks will push up costs to an exorbitant figure.

In some cases, poor performance will lead to dismissal but if inefficiency is allowed to continue unchecked, staff will lose interest, motivation will be reduced and there will be no incentive to produce god quality products. McDonald’s will be unable to reward staff under these conditions because profits will be insufficient to cover high wage costs plus benefits. It is no one’s interest to allow this to happen and McDonald’s strive to avoid this scenario by ensuring staff are fully aware that their efforts are appreciated and therefore continually measured.
By monitoring progress, departmental managers can assess the efficiency of staff and determine which ones are meeting the terms of their contract and contributing to McDonald’s success.

In the quest for efficiency, a comprehensive process of performance measurements are central to the fair distribution of rewards. A number of stages are set and part of the recruitment procedure is to gain staff with a high level of commitment to the aims and objectives of McDonald’s.

McDonald’s mission statement:
‘To be the UK’s best quick service restaurant experience’.
Goals:
Increased profitability
100% customer satisfaction
Increased Market Share.

From this framework, the human manager sets up strategies to assist departmental managers to measure their staff performance levels.
How does an employee know if they are doing well?
We will tell the employee if they do a good job and also point out where things can improve. Particularly in the first few weeks their progress will be monitored carefully and there will be a formal assessment at the end of their probationary period. Once they have completed their probation we will assess their performance on a regular basis.

When we have their performance appraisal their grading will be based on their personal attributes, teamwork, work standards, hygiene, initiative and customer focus. They will receive a copy of their performance review, so they will be able to see how well they are doing. As long as their performance is satisfactory they will receive a pay increase. Their pay is reviewed at 4 months, 12 months, and every 6 months thereafter.

The percentage pay increase are shown in the table below:

Performance Guideline

If their performance does not meet the required standards, or, at the manger’s discretion, an interim appraisal may be conducted.
A ‘Needs Improvement’ rating on two consecutive performance appraisals will result in disciplinary action being taken. Thereafter a satisfactory standard must be achieved or further disciplinary action will be taken. An ‘Unsatisfactory’ rating will result in disciplinary action being taken.

Do you offer any over increases?
Yes, we have a merit increase, promotion and promotional increases.
Restaurant/General Managers and personnel senior to them, can award employees merit increases over and above the performance review system for outstanding work or effort.

Our policy is to actively promote from within. If an employee does well in their job their Manager may consider them for promotion. If they are promoted, and their current rate of pay is above the minimum rate for their new position they will be awarded a promotional increase, which will be based on their last performance rating.

What opportunities are their for the employees within McDonald’s?
Many of our finest managers and senior company personnel have been promoted from within our restaurants.

We also have a Junior Business Management Programme and a Trainee Management Programme.

What is the Junior Business Management Programme?
The Junior Business Management Programme is open to anyone aged 18/19 years of age, educated to ‘A’ level or equivalent standard and wishing to continue a career in McDonald’s. The Junior Business Management programme has been designed to give complete training in the basic management functions of McDonald’s restaurant, whilst also pursuing a specific course of further education.

What is the Trainee Management Programme?
Whether an employee has joined McDonald’s on a part time basis to help finance their education, or commenced work with us whilst deciding career path to take, we may have opportunities for them.

McDonald’s employees have a wealth of talent and it is our aim promote this potential. Approximately 50% of our salaried management are promoted from within McDonald’s.
Many of these employees have already experienced the benefits of working for us and have the skills and attributes required by McDonald’s today.
With this in mind we are constantly looking to identify restaurant employees who show the required competencies. It does not matter whether they have worked for us for a day or a decade.

The types of work covered by human resource management in McDonald’s are as follows:
A policy-making role – establishing major policies that cover the place and importance of people in McDonald’s.
A welfare role, concerned with looking after people at McDonald’s and their needs.
A supporting role, concerned with helping other managers to develop their work.
A bargaining and negotiating role, concerned with acting as an intermediary between different groups and interests
An administrative role, concerned with the payment of wages the supervision implementation of health and safety laws, etc.

Human resources at McDonald's

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