McDonald’s Company’s Strategic HR Direction

Executive Summary

Human resource management policies, strategies and practices are fundamental tools for any organization. The most important asset for any organization is its human resource and therefore all issues affecting the workforce will be affecting the organizational performance directly. It has been found that issues of planning, recruitment, selection, retention, motivation, evaluation and industrial relations for employees are of grave concerns and are usually addressed through effective human resource management practices. In various business organizations including McDonald’s Corporation, we find that, many employees are neglected and are most often demoralized, not motivated in performing their duties in the particular organization. Therefore as a manager, one needs to find a way in which its employees are enabled to get a frequent and significant recognition from their employer. If such conflicts are not avoided then performance will be low. However, unwelcome changes in form of transfers, plant dysfunction and unprofessional interpretation of polices to employees are other issues that have been noticed in most Human Resource Department for most organizations leading to power imbalances between the employer and employee and thus poor performance, slower growth and less development opportunities.

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Introduction

Strategic management can be defined as the process where managers establish an organizations long-term objectives, set specific performance objectives and develop strategies to achieve these objectives in the light of all the relevant internal and external circumstances and undertake to execute the chosen action plans. Strategic Human Resource direction is mainly concerned with the overall performance of the employees regarding to the attainment of set objectives in an organization. McDonald’s Corporation was started in the year 1940 and is said to be the biggest chain of fast food restaurants in the world. It is involved in the sale of chicken, hamburgers, breakfasts, milkshakes, soft drinks, salads, fruits, and carrot sticks among other kinds of foods. (Brewster, 1995).

McDonald’s Current policies

The company’s policies have been said to be effective and efficient and thus the company has been successful in its operations as evidenced by the revenue that they receive in every year at the end of their fiscal period. McDonald Company has come up with policies that ensure that sincerity, fairness, hard-working and principled manner in the workplace is enhanced. The Corporation has by-laws that outline how the employees of the organization are expected to relate with the management, for example concerning payment of wages, dividend payment to stakeholders, directors, and the responsibilities of the directors. The corporation also has corporation political contributions policy whereby McDonald’s board of directors ensures that contributions are done in a way reliable with the corporation center ideals and to guard or augment shareholder value. This policy was put in place because the corporation understands that public policy issues have the prospects to impact its production undertakings, the entire workforce, franchisees, and the surrounding population that the corporation restaurants function. There is also McDonald’s Corporation Policy of Audit and non-Audit service provided by external audit firm, whereby the board of directors appoints an autonomous auditor who shall be responsible for ensuring that financial activities within the organization are carried out efficiently and effectively. The corporation also has come up with good social responsibility policy whereby they are involved in society projects, environmental safety, and cooperating with its suppliers to help advance their practices (Wagar, 1998).

Management Issues and McDonald Corporation

Management practices are employed in order to enhance the effectiveness of the corporation, and these management activities are planning, organizing, leading, and controlling. The management of the corporation through the planning function is responsible in coming with a schedule of business activities that will result to attainment of the set goals. The planning managers outline what to be done and the expected output from the employees. The organizing function of McDonald Corporation has to deal with the issue of allocating the tasks to the employees respectively according to their competence. Resistance by the workers may be experienced if the allocating process used is viewed to be inappropriate and oppressing which always leads to poor organization performance. So they have to convince the employees that everything will be okay and there interests will be taken care of. The leading/directing function of the corporation is faced with the tasks of demonstrating to employees how to do various activities and also involves the employment of charismatic leaders who can influence the employees towards positive attitude of performing their work. The Controlling management practice is responsible for monitoring the results of any undertakings and thus can make any corrections or adjustments if need to do so arise (Laursen and Foss, 2003).

Change Management

There is a unique relationship between the change management practices and techniques employed by an organisation and its overall performance. Certain sets of human resource practices are critical for any organization including McDonald Corporation and if they are not implemented, they will lead to poor performances. The practices discussed below are important to jumpstarting the organisation’s revenue and profit growth if well utilized. The main aspects of change management strategies are; employee motivation and retention strategies, employee selection strategies and employee management strategies. This strategy if implemented simultaneously in the organisation creates a family-like community and environment in the organisation (Worren and Moore, 1999).

Change management in business terms is the coherent and strategic approach to the management of the working force of McDonald Corporation. It combines academic, social and business practices in the application of techniques to manage McDonald Corporation workforce. These practices are designed to go inline with the company’s goals, objectives, vision and mission with specific emphasis on growth and development. An organisation such as McDonald Company needs to attract, maintain and also manage its employees effectively. There is an assumption that employees are just business assets in an organisation, but human resource development professionals explain that, these employees have varying goals and needs in life which can be utilized by the organisation to meet its targets while assisting the individual persons succeed in their careers. (Kottler, 2002).

The following are some of the core functions of change management in the McDonald Company.

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  • Workforce planning
  • Recruitment and staffing
  • Promoting industrial relations
  • Personnel development and performance monitoring
  • Workforce planning
  • Training, compensation and benefit management

It is considered that the change management practices used in strategic human resource management enhances techniques, systems and polices developed in line with the strategic management of the McDonald Corporation’s tasks. This strategic management promotes strategic planning and thinking in all aspects of employee assessment, problem solving and counselling. Good knowledge of employee behaviours, performance and needs helps the organisation to deal squarely with diversity issues e.g. culture, religion, race etc. In fact; studies have shown that, certain human resource practices have contributed positively to firm performance through workforce alignment. (Sparrow and Hilltop, 1994).

Manpower planning

Manpower planning within an organisation is very critical in that, cases of either overstaffing or understaffing is detrimental in one way or another. The economies of scale for the business together with specialization orders are lost if the organisation is understaffed. On the other hand, if overstaffing is sustained, it becomes a waste and also expensive for the organisation. These factors are therefore part of the planning process being carried out by human resource development officers in the McDonald Company. They ensure that the organisation’s workforce is certainly enough to meet the general duty requirement.

An assessment of the current and future workforce needs for the McDonald Company is done in advance to ascertain the level with which the organisation can retain, select or reduce its workforce. Change management is hence utilized to balance the resources to be used for human resource development with a view to ensuring that the organisational structures and objectives are upheld. It also helps in providing a general picture or overview of the details of the present workforce. These details may include; age, sex, number, forecast capabilities and experience. All these factors when taken into account will ensure that the organisation prioritizes workforce duties and their maintenance. (Kottler, 2002) Workforce planning also provides a critical analysis and statistical criterion of the human resource needs for the organisation. This will help the organisation plan for any future actions that are necessary to streamline operations within the organisation. Such actions may include, labour reductions, redundancy or retirement if possible. As the organisation develops in its missions, it requires more and more strict workforce planning. Human resource development therefore assists the management of the McDonald Company to foresee future shortages, excesses or needs in terms of employee management (Murray and Schoonover, 1988).

Employee recruitment, training and selection

The best method an organisation such as McDonald Company can directly improve its financial performance in the first place is to employ, select and train the right people. The best strategic practice to achieve this is to perform what is normally referred to as job-fit practice. This practice is useful to organisations which do not want to have their employees undergo extensive training but rather conduct their duties right away using their skills gained elsewhere. Another strategy is person-organisation fit practice. In this case, the McDonald Company seeks to recruit and select persons with good morals who are able to meet the organizations’ values, culture and structure. (Kottler, 2002).

Change management practices have been utilized to measure the analysis of the task to be done. These practices will guide the management to select persons with desirable attitudes and characteristics suitable for the job description. To ensure that this process becomes a success, some organizations are seeking services from expert recruiters to assist them get the best in the market. Although the process might be very expensive for the organisation, it is considered to be worth the cost. This practice is done with a sensible objective that will encourage potential employees to show up for the selection. It can be done by offering good remuneration package and other benefits.

McDonald Company has been carrying out management training for its entire workforce in preparation for future managerial duties. This is usually done in response to business demands for the company. It trains its employees on development in the selling of chicken, hamburgers, breakfasts, milkshakes, soft drinks, salads, fruits, and carrot sticks among other kinds of foods thereby being able to meet challenges of competition from upcoming companies. McDonald Company keeps its employees well trained, recruited and selected. Managers and other staff are recruited through various levels of selection. Some employees who join the company with higher level go through a formal training period (usually twenty four months training). Fresh graduates are given twelve months training opportunities while experienced managers have three months training to enable them gain skills in team, financial and sales management functions. Good training will enable the employees become innovative and this innovation is suited for the development of new products which will easily be absorbed in the market. Such change practice ensures that the company is able to meet the modernised market and customers hence increasing its overall sales margin (Laursen and Foss, 2003).

Employment Communication

Employment communication is the communication between employees in an organization which is said to be the most essential aspect that should be put into consideration for a better coordination among the taskforces within an organization. This means that the employees in McDonald Company are put in a position to communicate with their employers either in a formal way or informal way to pass information. Through this the employees are enabled to express their grievances, health matters, working environment and legal matters through communication to their employers. A healthy and supportive work environment is found to be the most crucial factor in creating robust employment relationships. Individuals with strong employment relationships tend to have helpful and friendly co-workers, interesting work, assess their workplace as both healthy and safe, are supported in balancing work with their personal life, and have reasonable job demands. High levels of employee trust and commitment are linked to perceptions that their employer cares about them. If the employees are not satisfied with these aspects then they can call for a meeting with the managerial personnel and this is said to be a formal way of communicating with the authority. (Mark, 2001).

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Communication in McDonald Company is also used in the delivering of the resources needed to do the job well; this is done through the provision of training, equipment and information thus indicating to employees the McDonald’s commitment to employees needs that are therefore required to accomplish their tasks. Resources are also likely to make workloads more manageable and enable workers to be more productive in their duties. Through training one can communicate to the employees on what is expected to be done to accomplish their tasks and the policies required to accomplish all tasks. Employment relationships in McDonald Company clearly matter for both employees and the employer. Research reveals that in McDonald Company strong employment relationships positively influence job satisfaction, skill use and development, workplace morale, and worker absenteeism. In general, strong employment relationships contribute to the quality of work life and the performance of the organization to be of high esteem. On the other hand, perceived problems with pay and job security are more important influences on willingness to work effectively than it is for the strength of employment relationships (Palmer and Akin, 2006).

Strong employment communication is associated with the more effective use of human resources and skills. The employees who have strong employment communication have more opportunities in their job to develop and use their skills and abilities in a free environment that they have ways of expressing their thoughts and feelings. This supports the creation of human capital that is so important for both individual well being and healthy organizations goals.

In this case we find that this communication is usually affected by many factors such as the organizational change which is said to may affect the employees negatively bringing up informal way of expressing their disapproval. Downsizing and restructuring are associated with reduced levels of trust, commitment, communications and worker influence. The employees may down their tools in protest or may also resist change through strike. The changes should be effectively communicated before they are put in place so that the employees are not caught unaware of the changes being effected. Employers or the authority should take charge to convince the employers on the benefits the changes will put in place from the existing organization structure, policies and procedures (Hoyer, 2001).

Decision making process

The most critical factor is that of the inability of senior managers to provide necessary support for the accomplishment of organizations goals in McDonald Company that supports change management. It is evidenced that the behavior of many senior managers has contributed immensely to poor success of the organization. This is explicitly witnessed in the decision making process. Senior managers have adopted behavior of self centeredness and they always think that they are the only one who makes viable decisions in relation to goals being attained. This has resulted to lower level managers and employees not to perform quality work because they are always not motivated when carrying out their respective duties. No matter how well the organization’s values and culture is drafted it requires the will of senior managers to maintain such values and cultures. The senior managers can change the attitude of their employees if only they can by example which will lead to good motivation and thus successful attainment of set objectives. Human resource is the most vital asset in any organization including McDonald Company and its senior staff has to enhance management efforts in their staff development in order to boost their morale and thus increase in productivity (Schon and Allan, 1995).

Organizational culture

The organization culture and values is a very important factor that has been neglected by several companies including McDonald Company. The organization culture and values in any business settings determine the way things are being done in an organization. Lack of clear definition of culture and values by the management of McDonald Company have resulted to formulation of human resource practices that are not in line with the set objectives or goals of this company. Research indicates that no matter how much the human resource assets of any organization are motivated to work but there is lack of clear policies formulated by the executives of such organization, then there is possibility of failure in achieving efficiency and effectiveness in any organization.

Over the past few years McDonald Company organizational values has been successful because of its strategic HR direction that the organization has developed. Indeed the overall management of the company has been able to foster an environment of growth and development in the organization. The company is accredited with good corporate planning which has enhanced overall integration of planning system within the organization which incorporates both strategic and corporate planning in the company. (Bjbrkman, 2001).

Recommendations for HR Department

The HR department should formulate corporate strategies that incorporate thorough analysis and clarification of the corporation mission statement. The department should also offer guidelines to the rest of the management when considering how business should develop and in what direction it should be directed to. In this line the HR department should clearly ensure that strategies developed in the organization should be the ones that direct efforts towards accomplishing the organizational basic mission or purpose (Jeffrey, 2000). In order to enhance the activities of the corporation, the HR department should redesign employee-employer relationship in order to remain competitive in the market place and to respond to any changes in the market place.

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It should be noted that, McDonald Company has been successful because of its strategic HR direction that the organization has developed; but with lack of consistency, the company has experienced low financial performance. Therefore, the overall management of the company should foster an environment that enhances growth and development in the organization. McDonald Company should incorporate excellent corporate planning which will augment overall integration of planning system within the organization which will incorporate both strategic human resource and corporate planning in the company. Further, the corporation should rise to challenges of management, recruitment and competition by developing management strategies that can cope with industry changes now present in the fast food business. The company should do this by utilizing its revenues on technologies that will boost its competitiveness. (Cullen and Boteeah, 2005).

The performance of McDonald Company should be determined directly by the performance of its employees. The human Resource department of McDonald Company should vividly monitor the evaluation if the employees of via the use of human resource evaluation systems. Such systems like human resource audit tool should be utilized continuously with a view to retaining useful employees. McDonald Company should avoid using soft approaches that may lead to huge losses in the future due to the fact that most employees in many organizations are joy-riders in the organisation.

Further McDonald Company should utilize tight control strategy as a human resource strategy in evaluation of employees. This strategy allows managers to monitor the daily activities of the workers and make sure that the employees do not determine the pace with which the schedules of the company are driven. It must be driven by the managers because they have the overall skills that are future-focused. Some explicit rules governing the conduct of employees are not usually desirable as it portrays a top-down approach. The evaluation practice will ultimately promote self-assessment for the employees which means that there is humble communication from one employee to the other with an objective to outperform each other. (Bramley, 1996).

Further the Human Resource Department of McDonald Company should note that no matter how much the employee is qualified, there is need for training and development for all the employees. For example, on the first day of employment, an employee of the company should be subjected to induction and orientation processes which will enable them to grasp the practices within McDonald Company.

Conclusion

Strategic management in McDonald Company is a very crucial concept because managers establish organizations long-term objectives, set specific performance objectives and develops strategies to achieve these objectives in the light of all the relevant internal and external circumstances and undertake to execute the chosen action plans. Strategic Human Resource direction is mainly concerned with the overall performance of the employees regarding to the attainment of set objectives in an organization.

However, McDonald Company should rise to challenges of competition brought about by globalization by developing organization’s strategic objectives that can withstand changing business activities. There should be clear understanding of human resource practice concept by all senior level managers in order to foster a good working environment and thus attainment of goals.

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