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Investigating the effectiveness of human resource management at McDonald's Restaurants Limited

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Table of Content Terms of Reference Page 1 Executive Summary Page 1 Introduction Page 1 Methodology Page 1 Its present and anticipated strategy Page 1 Its current HRM practices Page 3 How the HRM practice enables the business strategies to be achieved Page 4 How the HRM practice reflects the theories of strategic HRM Page 5 Recommendations Page 8 Bibliography Page 9 Word count = 2497 A) Terms of Reference On the 1st of October 2003, the management department requested a report written investigating the effectiveness of human resource management at McDonald's Restaurants Limited, and how this operation helps the organisation achieve their strategic aims. The report was to be submitted on the 9th December 2003. B) Executive summary McDonalds has various business strategies being introduced over the next two years. The report investigates how the Human Resource Management (HRM) practice enables the strategic plans to be achieved. McDonalds are expanding the number of restaurants in India, while closing selected stores in the UK, plans to change packaging, deco and uniform will affect the culture of the organisation. McDonalds are also diversifying, 'McKids', brand of clothing, and toys. It is the HRM policies that will ensure a smooth change over. The major concern is the cultural change; HRM must ensure that staff are involved in the changes allowing them to 'buy' into the plans. The extension plans should run efficiently as all the policies and legislation should already be in place. ...read more.


Staff are entitled to various benefits, health care, pension, company car, bonus scheme, sick pay and stock options. McDonalds supports the 'Opportunity Now' Campaign, increasing the number of women they employ, "43.30%"18 of their workforce is female. The company now allows qualifying staff up to eight weeks paid maternity or paternity leave. The company works closely with various disabled organisations, and employs where possible disabled people. The diversity development within the company insures the working environment is free from discrimination and harassment and job applicants and employees, will not be treated less favourably on the grounds of marital status, colour, age, gender, race nationality, ethnic origin or disability. McDonalds believes that "training is the foundation of their success and vital for improving the business"19. Hourly paid staff receive on the job training, supplemented by computer based and other training methods, Management staff receive training at one of the company's six British training centres. McDonalds "restaurants work to the standards which meet those required by legislation"20, they also have various policies covering food quality and nutrition, also working closely with suppliers ensuring animal welfare. The company has a number of franchises, which means that although McDonalds controls the majority of establishments, legislations, laws and policies are the responsibility of the franchise operator. G) How the HRM practices enables the business strategies to be achieved. Many policies are in place, covering a wide range of topics; enabling HRM to support the company in achieving their overall strategic plans. ...read more.


McDonalds has integrated this approach, by considering the environment with their packaging and adjusting menus to suit different cultures. This approach also influences staff promotions that the company offers, staff are offered appraisals, a means of increasing their job opportunities. Barney (1991) suggests that there is a "resource based model"; physical, financial, human and organisational resources are the main link between internal resources and the company's performance. Suggesting that it is not enough to have HR in line with strategy, and developing people will raise their commitment to the company, and provide an advantage over competitors. Although McDonalds do invest in people "66.26%"28 are under the age of 20, suggesting the majority of these are temporary, so will not progress through the company, leaving training costs continually rising. Gould's 'Model of Morale', should be considered, suggesting that high staff turnover, sickness, absences and low performance within the company, is caused by low staff motivation, job satisfaction and group cohesion. These problem stem from inadequate internal factors such as "perception of leaders, matching needs to the job and identification with organisational goals"29, and external factors such as "status, age, pay, conditions, job market policies, training, equipment and economic state"30. Hofstede undertook worldwide research into culture and concluded that different countries mainly have four different cultures, "individualism, power distance, uncertainty avoidance, and masculinity. Depending on how the country viewed these areas, Hofstede categorised the countries further, pyramid of people, well-oiled machines, village market and family. As McDonald's operates in 121 countries; consideration for this theory may allow a better understanding of the needs and values of staff. ...read more.

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