McDonald’s Human Resources Management Practice

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Background

McDonald’s is one of the leaders in the food industry and one of the most famous fast-food restaurant chains worldwide. The company operates in 119 countries with over 200,000 employees and consolidated revenues of more than $21 billion as of 2019 (McDonald’s, 2020). The company concentrates on meeting its customers’ needs and providing high-quality services. One of the approaches to achieve this goal is effective human resources management (HRM) that involves a set of policies and practices based on the principles of sustainable development of the staff (McDonald’s, 2020). McDonald’s aims at creating a team of employees who are committed to organizational goals and ready to generate ideas and bring them to life in order to maintain the company’s competitive advantage. One of the effective policies targeting this objective is internal recruitment that is an important part of the company’s HRM strategy. This report dwells upon this policy with a focus on internal and external factors affecting it and methods to improve the practice.

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HR Approach and Internal and External Environment Affecting It

Organizations shape their human resources strategies to achieve competitive advantage and attain the established goals based on the resources they have. These practices are influenced by inner and outer organizational contexts, national and institutional contexts, as well as international contexts (Wilton, 2019). The inner organizational context encompasses the existing organizational culture and leadership style, while the outer organizational environment involves the overall strategy and the industry peculiarities.

It has been acknowledged that staff retention tends to involve multiple strategies aimed at training and empowering employees (Choi and Joung, 2017). According to CIPD (2011), employee training and development are critical for proper performance, and managers should receive training to have the necessary skills to support and retain personnel effectively. Food-service corporations provide diverse training and development opportunities to their employees, which has a positive influence on their performance and commitment (Bevan, 2012). To attract and retain employees, fast-food companies try to adopt this approach and provide wide opportunities to their staff. McDonald’s core values include the creation of a team of high-profile professionals committed to organizational goals where leaders support and guide employees, providing diverse opportunities for growth and self-development (McDonald’s, 2020; Delleville, 2019). Therefore, internal recruitment that implies on-the-job, as well as formal, training is consistent with this organizational strategy.

As far as the external environment affecting organizations’ HR practices on the national and institutional levels, these are also strong factors that include legal, political, and social systems (Wilton, 2019). Clearly, organizations provide services that are compliant with the current regulations, norms, and recommendations (Bevan, 2012; Kalleberg, 2003). If a business does not follow these rigid rules, serious consequences, such as litigations, are likely to occur. McDonald’s ensures that all its practices comply with the existing federal and state, as well as international, which helps the corporation to provide a high-quality service to its customers (McDonald’s, 2020). The company also attempts to improve its services based on recommendations provided by diverse governmental institutions. For instance, the company improves its menus to provide healthier foods (McDonald’s, 2020). The organization also tries to make the working environment more diverse and flexible, which is a recommendation and a new trend in the industry (CIPD, 2016).

In addition to strict regulations and standards, companies should consider social norms as well (McSweeney, 2002). Societies are different in terms of their orientation (on future, on performance, or on humane values), assertiveness, power distance, collectivism, gender egalitarianism, and uncertainty avoidance (McSweeney, 2002). Americans value goal orientation, high performance, and individualism. McDonald’s HR practices are consistent with these peculiarities, and the company tries to create an environment where people’s effort is properly recognized and awarded, their needs are met, and where they can collaborate to achieve organizational goals.

Finally, international contexts also influence any corporation’s operations. For example, diversity and inclusion are regarded as priorities on a global scale. International institutions try to introduce regulations and recommendations supporting the diversification of the labor force in terms of ethnicity, gender, socioeconomic status, and physical or mental ability (Equality and Human Rights Commission, 2008). It is noteworthy that the focus on diversity also has a considerable impact on HR policies as employees’ cultural and ethnic backgrounds are different. The company’s employees are provided with equal opportunities, and staff training is seen as the central strategy to ensure effective collaboration and teamwork. It is also important to add that the impact of the difference in cultural backgrounds is now being questioned by many researchers and practitioners (McSweeney, 2002). Globalization is one of the factors contributing to the diversification of cultural groups that were more homogeneous several decades ago. At present, cultural differences are less pronounced in the occupational setting, but, of course, cultural peculiarities still need to be considered.

HR Strengths and Weaknesses

Strengths

As mentioned above, the organization under consideration utilizes staff training and development as a key approach to ensure effective retention. This tactic has important advantages that have been acknowledged (Benson and Brown, 2007; Perozzi, 2019). For instance, one of the strengths of this approach is the development of the team, where all team members are committed and engaged (Benson and Brown, 2007). Employees who are properly trained are likely to work for a company for a longer period and be more committed to organizational goals. Recent research indicates that people performing more complex and knowledge- or skill-based tasks are more satisfied with their jobs compared to those completing routine tasks (Benson and Brown, 2007; Overell et al., 2010). Overell et al. (2010) claim that skill utilization is regarded as an important motivating factor enhancing employees’ job satisfaction. Staff training and development aims at the creation of a sound background to address these needs.

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So, modern organizations invest considerable funds to train employees through internal and external centers of expertise (Ulrich, Younger, and Brockbank, 2008). Effective training tends to be based on or consistent with the principles and standards, as well as values that constitute the company’s culture (Berman et al., 2019). Therefore, this kind of training serves several aims because employees gain specific knowledge and skills necessary for the completion of assignments and form a specific set of values. People are exposed to an array of values and norms they accept, which makes them more committed and ready to work hard.

Staff training and development enhances employees’ performance, which is another important strength of this HR tactic. Even if an organization has higher highly skilled professionals, they may need the training to meet the standards existing within the company (Wellin, 2007). Clearly, certain standards and norms differ across industries and companies, so certain training is beneficial for a newcomer. It is possible to state that companies raise their own knowledge workers who exhibit extensive knowledge, diverse skills, and a full understanding and acceptance of organizational values. All these components are necessary for the development of commitment that is, in its turn, critical for high performance.

Finally, training and development enhance employee motivation as modern people are eager to learn and acquire new skills. People tend to view companies that offer training as a more attractive job option (Kalleberg, 2003). In many cases, job training and development initiatives serve as a means to attract and retain talent. Organizations offer numerous incentives that address current educational issues associated with the student loan crisis (Perozzi, 2019). Organizations collaborate with different educational establishments and offer formal education to their employees, which has a positive effect on the company’s image, employees’ motivation, and potential employees’ eagerness to get the job.

Weaknesses

At the same time, this HR approach is also related to certain disadvantages and weaknesses. First, employee training and development require quite a considerable investment (Berman et al., 2019). The American society and fast-food industry experience substantial financial constraints due to several reasons. Therefore, organizations may find it difficult to allocate the necessary amount of resources to provide high-quality training to their employees (Perozzi, 2019). The major resources to be mentioned include money and time. Companies need to hire (external or internal) trainers and ensure the availability of materials (learning resources and software). Employees who participate in training projects spend less time (or even no time) performing their tasks, which may have a negative impact on the team’s (and the company’s) performance. Time is another valuable resource many companies cannot waste. Training and development imply the investment of time, while organizations may need employees with a set of certain skills at a specific time. Many businesses find it more appropriate to hire an individual who has the necessary skills rather than investing time and money in training their current employees.

In addition to costs, the outcomes of the training are often difficult to predict. The introduction of new training projects and incentives is associated with the highest risk as the results tend to depend on the trainer’s qualifications and skills. It can also be hard to evaluate the effectiveness of a program for a particular company, so the choice of the right course and methods is crucial (Berman et al., 2019). HR specialists should also interact with employees and guide them in their educational paths. In simple terms, companies should make sure that a training course fits the needs and capabilities of a specific employee to achieve the highest results.

Finally, the provision of training may be less cost-effective due to employees’ decision to quit. Employees who gain new skills often leave for a new job, which results in losses for the company (Berman et al., 2019). Hence, organizations should create an environment and setting in which the employee receiving training will remain in the team rather than start seeking new employment.

Archways to Opportunity: Internal and External Factors

Background

McDonald’s has introduced diverse HR policies and practices to create a safe and favorable working environment. One of the recent HR policies related to staff training and development is entitled Archways to Opportunity® (‘Archways to Opportunity®,’ 2020). This policy encompasses the provision of formal education to several groups of eligible employees. The corporation collaborates with different educational establishments, including high schools and colleges. People working in the corporate segment or restaurant employees can gain education related to English proficiency, earn a high-school or college diploma, as well as receive professional advisors’ assistance in their career development (‘Archways to Opportunity®,’ 2020). The policy was commenced in 2015, and approximately 55,000 U.S.-based employees were enrolled in different programs through this platform. According to this policy, employees have an opportunity to get partial tuition compensation under a set of circumstances. This policy implies the engagement of high-performers who display proper time management skills and have shown their commitment to organizational goals through their performance and involvement.

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Internal Factors

To evaluate the policy under consideration, it is possible to analyze the way some internal and external factors affect it. Some of the most influential internal factors to be mentioned include organizational culture, resource availability, organizational goals, and the staff’s attitude. The policy is consistent with the major principles and standards utilized in the organization. Since the organization focuses on growth and development, formal education is one of the ways to achieve this objective (McDonald’s, 2020). The company declares its commitment to empowering employees and addressing their needs, as well as the development of the community. All these points are present in the policy in question.

It is noteworthy that McDonald’s manages to retain the employees receiving education through the program and those who have completed their studies by ensuring flexibility. Modern people place a high value on flexibility as they are eager to maintain proper work-family balance while attaining their professional goals (Kalleberg, 2003). Companies dividing employees into internal and external labor forces manage to enhance retention. Employees are willing to be “insiders” who receive diverse perks (including academic opportunities) while still maintaining a certain degree of flexibility (Kalleberg, 2003, p. 158). As mentioned above, employee motivation increases as their needs are addressed. In terms of this policy, McDonald’s also offers promotional opportunities to its employees, which also has a positive impact on staff retention (‘Archways to Opportunity®,’ 2020; Perozzi, 2019). Although the policy requires a substantial investment, the company attains its goals regarding performance and the provision of high-quality services to its customers.

The focus on transformational leadership is a part of the company’s organizational culture. The provision of assistance in gaining a formal education is an effective method to develop transformational leaders who will innovate and focus on sustainable growth (Perozzi, 2019). The policy under analysis is based on the principles of transformational leadership as it facilitates people’s creativity, innovative effort, and commitment to continuous self-development.

External Factors

Outer organizational and international factors have an impact on the implementation and the effectiveness of the policy under analysis. The current situation in the industry unveils the need to transform businesses to address the challenges societies are facing. Financial issues and pandemic-related restrictions have made fast-food companies develop new strategies. High-skilled professionals are becoming critical to obtaining a competitive advantage due to the fundamental shifts to automatization, online and contactless service (Rosenbaum, 2019). People’s dining habits are changing, so the fast-food industry has to accommodate them accordingly. Hence, in order to remain competitive, McDonald’s should develop news strategies and services to better cater to its customer’s needs. Archways to Opportunity® can be instrumental in attaining this goal as employees gaining formal education will have leadership skills, as well as specific skills that will be valuable for the development of the corporation.

Recommendations

Focal Point: Funds and Courses

In order to enhance the policy under consideration, the corporation should bring core practices into focus. As mentioned above, many unskilled workers will lose their jobs due to further automatization, so skilled labor will ensure companies’ competitive advantage. McDonald’s should choose the courses and programs associated with a specific set of areas related to the fast-food industry. The company should be more careful in providing funds to ensure that the person obtaining formal education will remain in the organization and will contribute to its development. It is possible to confine the eligible courses to the ones related to such spheres as technology, restaurant/food service, entrepreneurship, business management, and healthcare. Clearly, the completion of these courses should enable the graduate to become a part of McDonald’s teams in the existing departments.

At present, the policy ensures assistance in gaining an education in any sphere, and the graduate is not required or even expected to continue working for the company (‘Tuition Assistance,’ 2020). However, in order to decrease costs and increase margins, the company needs to allocate funds more effectively, which is consistent with the current trends in the industry (Choi and Joung, 2017; Rosenbaum, 2019). High retention in the industry is associated with high costs for companies, so it is important to address this issue. The policy in question can help in retaining talent and a skilled workforce, which is one of the most appropriate strategies in the current situation.

Understanding Outcomes

As mentioned above, one of the policy’s outcomes is the considerable number of graduates with diplomas and certificates (approximately 55,000 people) (‘Archways to Opportunity®,’ 2020). However, there are no specific data regarding the rate of graduates employed at McDonald’s, the number of high-performers, and other results of the projects and programs launched in terms of the policy under discussion. In order to ensure the effective implementation of the policy, it is critical to conduct a comprehensive study that will identify the cost-effectiveness of the policy and possible (exact) areas for improvement (Berman et al., 2019; Wilton, 2019). Both quantitative and qualitative data should be analyzed in terms of this research.

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Informing People

Archways to Opportunity policy is well-publicized among employees, but the dissemination of information can still be improved considerably. In terms of the policy, the Where You Want to Be campaign was launched in 2018 (‘McDonald’s Launches Career Advising Campaign,’ 2018). Industry influencers shared their stories to raise the company’s employees’ awareness of the policy and the corresponding educational opportunities. This kind of informational incentive can enhance the effectiveness of the policy. However, it should be extended considerably by involving more people and providing more data.

Success stories told by McDonald’s employees should be the core of this project. Managers and executives will encourage employees to gain a degree by revealing the role education and skills play in their professional life. It is also necessary to provide employees with specific numbers and meaningful details concerning the available courses. People should also be informed about the upcoming changes in the industry due to the most recent trends (Berman et al., 2019). McDonald’s employees and participants of the educational projects should be motivated to remain in the organization rather than seek other employment options. The dissemination of information regarding prospects within the organization will assist in reaching this objective.

Conclusion

On balance, it is possible to note that McDonald’s HR practices and approach to staff training and development, with its Archways to Opportunity, in particular, can be seen as effective and favorable for the company’s sustainable development. The organization pays substantial attention to such aspects as motivation and retention, which leads to talent retention and the capability to address internal and external challenges. The fast-food industry is facing serious issues due to financial constraints in the U. S. and global economy and pandemic concerns, which leads to apparent shifts in operations and practices. Customers are changing their eating habits and need a different dining experience.

McDonald’s, with its Archways to Opportunity, can address the mentioned challenges as the company will increase the number of skilled employees who are motivated and committed to organizational goals. The skilled workforce is one of the pillars of the future fast-food industry that is becoming more automated and digitalized. McDonald’s also needs to allocate resources effectively, so the list of eligible courses needs to be revised and updated regularly. The focus should be on retention, and employees should be encouraged to remain in the organization. This objective can be achieved by offering specific courses, providing proper promotional opportunities, and informing people accordingly. This process should also be facilitated by the implementation of comprehensive research regarding the current policy, as well as the effectiveness of the improved policy.

Reference List

Archways to Opportunity®. (2020). Web.

Benson, J. and Brown, M. (2007) ‘Knowledge workers: what keeps them committed; what turns them away’, Work, Employment & Society, 21(1), pp. 121–141.

Berman, E. M., et al. (2019) Human resource management in public service: paradoxes, processes, and problems. 6th edn. Thousand Oaks, CA: CQ Press.

Bevan, S. (2012) Good work, high performance and productivity. Web.

Choi, E. and Joung, H. (2017) ‘Employee job satisfaction and customer-oriented behavior: a study of frontline employees in the foodservice industry’, Journal of Human Resources in Hospitality & Tourism, 16(3), pp. 235-251.

CIPD. (2011) Managing careers for organizational capability. Web.

CIPD. (2016) Employee outlook – commuting and flexible working. Web.

Delleville, V. A. (2019) ‘Enhancing adult student outcomes and employability with prior learning assessment’, New Directions for Adult and Continuing Education, 163, pp. 83-93.

Equality and Human Rights Commission. (2008) Talent not Tokenism. The business benefits of workforce diversity. Web.

Kalleberg, A. L. (2003) ‘Flexible firms and labour market segmentation: effects of workplace restructuring on jobs and workers’, Work and Occupations, 30(2), pp. 154-175.

McDonald’s. (2020) 2019 annual report. Web.

McDonald’s launches career advising campaign for restaurant employees with the help of five industry influencers. (2020). Web.

McSweeney, B. (2002) ‘Hofstede’s model of national cultural differences and their consequences: a triumph of faith – a failure of analysis’, Human Relations, 55(1), pp. 89–118.

Overell, S., et al. (2010) The employment relationship and the quality of work. Web.

Perozzi, B. (2019) ‘Leadership development through transforming the student employment process’, New Directions for Student Leadership, 162, pp. 23-36.

Rosenbaum, E. (2019) ‘Panera is losing nearly 100% of its workers every year as fast-food turnover crisis worsens’, CNBC, Web.

Tuition assistance. (2020). Web.

Ulrich, D., Younger, J. and Brockbank, W. (2008) ‘The twenty-first century HR organisation’, Human Resource Management, 47(4), pp. 829-850.

Wellin, M. (2007) Managing the psychological contract using the personal deal to increase business performance. Brookfield, VT: Gower Publishing Ltd.

Wilton, N. (2019) An introduction to human resource management. 4th edn. Thousand Oaks, CA: Sage Publications Ltd.

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