McDonalds is a fast food retail business categorized among the largest food corporations in the world. Its establishment and operations caused a considerable change in people's way of eating and general lifestyles all over the world. The organization has acquired a numerous number of customers globally serving more than fifty million customers every day. This is because the organization has more than 31,500 outlets (Boxall & Purcell, 2011, 66). All these outlets serve customers at different parts of the world. McDonald's organization was established in 1940 by two brothers; Mac McDonald's and Dick (Detort, 2007, 868). Its success and prominence was enhanced when the name of the company was franchised out after incorporating Ray Kroc into business. By 1960s, the company had achieved immense growth, which contributed to the expansion of automobile in the United States. The expansion had been caused by suburbanization. Attributed to the fact that the company has been successful in running its food business, it can be identified as an organization that has achieved successful implementation of its business strategies.
The organization's overall business strategy and goals.
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The organization's greatest business strategy was effected in 1954 for the first time when Ray Kroc through his efforts put the company on spotlight by franchising the business (Boxall & Purcell, 2011, 86). Since then, the company's business history has achieved a considerable growth. Its success has been recorded on the international platform with its operations happening in more than 119 nations globally (Cannel, 2009). This strategy enabled the company to access its food products to a large number of customers worldwide who in response enjoy the products served at the outlet. The company's trademark was also carefully studied before being designed; it was then accompanied by an acceptable clown called Ronal MacDonald. Over the years, new business ideas have been incorporated in the organization, and this has enabled the company to improve its business operations. The egg muffin and big Mac have served as some of the most creative products of the company. The organizations marketing strategy has also been excellent, for instance, the happy meal strategy, an innovative approach (Detort, 2007, 875). It attracts a lot of children to visit the McDonalds restaurant because of the presence of toys and dolls. The McDonald's outlets world-wide offer a uniform menu, a common characteristic of the fast food business. It includes cheeseburgers, French fries, hamburgers, chicken sandwiches, salads, ice cream sundaes, desserts and milk shakes. The organization has also increased the number of modern nutrition based products such as the Salad Pius. This uniformity prevails in all restaurants all over the world.
One of the main business goals of the organization has been to continue finding means that will enable it to maximize the efficiency of energy in all its restaurants. The company has managed to achieve this by partnering with various markets. These have enabled it manage the process of testing, evaluation and implementation of the modern technologies of energy efficiency maximization. According to Gooderham (2008, 160), steady and noticeable progress has been witnessed through the improved method of measurement, tracking of energy and its performance in all the restaurants. The company has also attempted to include a system through which the best practices are shared. It also promotes scaling and transfer of initiatives that are innovative and effective.
McDonald's overall HR strategy and goals
The human resource is at all levels seen as the most significant resource that contributes to the overall success of a company in achieving its objectives. It is, therefore, regarded as a vital component in the process of making strategic decisions. Human resource management comprises several issues ranging from employment, retention, promotion of healthy relations, organizing schemes of rewards and employee development programs. The first process in McDonald's human resource management is recruitment, where suitably qualified staffs are hired by the company (Holbeche, 2009, 122). The reason why employees should be qualified is so that they can contribute reasonably towards the attainment of the set goals in a manner which is cost-effective. The organization ensures that after recruitment, the hired employees are taken through training and retention programs. The retention programs are meant for increasing the rate of employee retention in the organization. The company also emphasizes the link between management of people and the corporate strategy, and policy which guide recruitment and retention of employees. It is assumed that people who work in fast food restaurants have low skills and the high turnover rate of employees is attributed to the low salaries they are paid. Therefore, the organization has improved the salary of its workers and their career prospects as a way of increasing employee recruitment and retention (Dundon, 2004, 300). This policy has been successful. The organization has also succeeded in the effective implementation of the human resource strategy. This is the reason why it has remained competitive both nationally and on a global scale. The labour markets, for instance, in the United Kingdom have experienced a substantial change, and this has increased the concerns of the educated workforce about their future career prospects and development.
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Globalization is another valuable strategy that has caused rapid growth and expansion of the company. This means that the company has managed to access more customers but on the other hand, it experiences more competition from the already existing fast food restaurants. Therefore, while implementing its human resource strategy, McDonald's corporation has been successful in balancing various preferences, external environments, needs and interests. According to McDonald's Corporation UK (2008), McDonald's human resource department uses these significant factors as critical tools for evaluating the efficiency of retention strategies. McDonald's HR has been successful in addressing the various employment and cultural legislations presented by different nations during the expansion of its business. The company's international success has been enhanced by the standardization of its products so that customers visiting any of the restaurants experience uniform service (Boxall, 2011, 50). Therefore, all employees undergo training which enables them to yield the expected results irrespective of their geographical location and background. This training program is a significant aspect of McDonald's global strategy of the HR (Ivancevich, 2003, 60). This strategy is also utilized as an employee retention tool however, other applications such as recognition and rewards are also employed.
One of the HR goals at the McDonald's corporation is to explore and respond to all challenges that hinder the employee retention strategies to avoid high employee turnover rates in the organization (Boxall, 2011, 56). This has been achieved by effectively implementing the employee retention schemes such as regular salary increment.
Components of HRM policy and practice in the organization
For any serious organization, its plans of human resource present an overview of the future requirements that will be needed for labour. It also specifies how these requirements should be achieved. Human resource planning is a common practice at McDonalds Corporation. This helps it to retain the right quality and number of staff at any given time in a way that is cost-effective to the company. At McDonald's, the following components of HRM policy and practice are embraced:
McDonald's global success in its food chain business is attributed to its maximum use of human resource. This is the main reason why the company is at the top position on a global scale (Gooderham, 2008, 161). The company logically involves its employees in its problem solving procedures. Employees are assigned duties according to their skills and knowledge.
Recruitment and selection
Recruitment is a key strategy used by organizations to retain employees. Employees have a long term value to the organization; therefore the process of recruitment is given a greater consideration. McDonald's corporation's outstanding success is attributed to the recruitment and retention of super talents (Holbeche, 2009, 201). The organization's workforce is dominated and composed of the needed knowledge and talents in the company. This guarantees it its competitiveness on both local and international scale. It is a crucial practice the company has embraced for many years, and it ensures that the process of selection lays a platform for evaluating the candidates' capabilities, values, interests and aspirations (Holbeche, 2009, 99). The company is also able to develop a review of how all these conform to its organizational structure. McDonald's company is, therefore tasked with the greatest responsibility of ensuring that it recruits the right people for the correct job.
MacDonald (1994, 123), argues that training is a significant process meant to change and improve behavior, skills or knowledge and attitudes by means of various activities in order to attain a performance level which is effective. McDonald's company uses training as an opportunity to develop its employees and enable them to meet its present and future requirements. Training in the organization is organized in two categories; the on-job training which is conducted at the employee's place of work, secondly, the off-job training which is conducted away from the trainee's place of work and which enables them to learn issues outside their scope of work. McDonald's has been remarkably successful in utilizing training as an agent of change to bring improvement to its organizational culture. It also enhances the effectiveness of the organization especially during competitive markets.
The organization has well organized assistance programs for education which keep its employees and even customers learning continuously. The program is available at the franchises and company restaurants. Its restaurant management program has made it to be only restaurant noticeable by the American Council for Education (Holbeche, 2009, 66). The organization supports learning by awarding scholarships to its student employees who excel academically. It awards $2,500 each year to the student employee who achieves very outstanding results in every state in the US.
Human Resource Development
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Any company is totally reliant upon its production's quality in association with the excellent customer service its worthy customers keep experiencing on a daily basis. For all these efficiencies to be achieved in an organization, there is a significant need for the company to have efficient strategies for managing people in a place of work (Boxall & Purcell, 2011, 81). It involves the process of acquiring, utilization and development of all types of resources whether human or financial as needed by the firm to promote the quality of goods enjoyed by its customers buy.
In general terms, employee relation is a significant aspect in human resource management. The employees form the core part of any company. Employee relation is a concept derived from the fact that employees are the priority resource of a firm, and they support the company's competitiveness in the business world. This is treated with priority because those employees who are not motivated eventually become a serious tragedy to the organization. Gooderham (2008, 155) demonstrates that, employees who are not motivated become a liability to the company in the sense that their actions impact negatively on the organization's progress. Indications such as poor time keeping, reduced productivity and absenteeism will be observed among individuals or a group of employees who are dissatisfied. This in the long-term undermines the company's efforts to remain competitive in business and eventually impacts negatively on its financial health (Rollinson, 2005, 89). Employee relations are composed of various components such as the policies that govern the practices of a company, whether formal or informal, employment tribunals and institutions, trade unions, management and government policies.
Employee participation and voice
Employee voice is an indispensable form of communication. It is used by employees to express their dissatisfaction, complaints or any other form of grievances. Companies have grown to realize the relevance of integrating employees in the process of making decisions. Measures have been put in place in the past few years to enhance the need for consultation between employers and employees. Employee voice is regarded as a significant tool in McDonalds Corporation; in fact, it is taken as an outstanding organization's success factor. Cannel (2009) argues that positive employee voice regimes contribute to high productivity and quality of employees. Besides, it prevents any harmful arrangements that would have occurred in an organization. It is also an opportunity which allows employees to stick in the organization for a long time. This is because they have a way which enables them to express their issues.
In McDonald's corporation, employees are paid according to their level of performance. This means that, the better an employee performs, the higher the pay. The compensation is fixed, and those employees with better skills and experiences are well paid. Rewards are organized basing on an employee's overall performance in the year (Detort, 2007, 877). The organization has an exceptional program designed to give recognition to members of staff with outstanding performance.
Rewards and Performance management
At McDonald's corporation, performance management is reviewed on an annual basis. Leaders in charge of governance and compensation committee hold a consultation meeting with independent directors to approve the CEO's annual objectives and expectations (Detort, 2007, 880). These goals, however, are in line with the objectives of the organization. Performance management helps managers or leaders to be sure that activities of employees are supportive of the goals of the company (Boxall & Purcell, 2011, 111). It is a continuous process in the organization whose aim is to develop the performance of employee and enable them meet the company's strategic goals. Rewards are organized basing on an employee's performance in the year. The organization has a significant program designed to give recognition to members of staff with outstanding performance.
How HRM components contribute to the achievement of the organization's overall strategy (vertical integration).
McDonald's main goal is to obtain customer loyalty by offering the best products and services. It, however, has many other goals such as being the most successful food chain business in the world, a strategy it has so far achieved and enjoyed. Various HRM components such as an exemplary employee salary, best reward schemes, healthy employee relations in the organization and proper training programs. The organization has more than five hundred thousand employees world-wide (Rollinson, 2005, 56). Managers have been able to organize comprehensive human resource management plan and employee activities by employing different strategies. The overall organization's strategy at McDonald's corporation entails the development of employees through training, benefits and rewards, and consultation and communication all aimed at achieving the overall company objective.
How various components of HRM support each other to achieve the overall HR strategy (horizontal integration)
Each and every organization has a complex responsibility of managing human beings because they the most essential resource it has. With regards to the proper utilization of resources, there is no machine that can ever take and work in a place of a human being. In the present competitive market, McDonald's corporation has a department of human resource, which is helpful in contributing to the company's overall achievement (Ivancevich, 2003, 73). The department does not just work on its own; instead, it works in coordination with relevant components of human resource such as employee recruitment, performance management and rewards, and employee relations and many others. Human resource management at McDonald's has a variety of activities such as strict observation of regulations, provision of excellent environment for work, uniform treatment of employees, analysis of recruited talent and employee retention programs.
The impact of organizational, sector/industry, national and international contexts on HRM policies in the company
In the past few years, McDonald's growth has been recorded on both local and international scale. This means that it has grown into stiffer competition from other players in the market. Growth opportunities in the organization are declining due to the emergence of substitute products and competitors (Ivancevich, 2003, 69). It enjoys the advantage of being the strongest player in the industry for a long time, however, to maintain this, it has to improve and grow its market so that it continues to lead the market in the industry. Legal and political influences are significant forces since many aspects of human resource management policies are affected by them (Shafiq, 2011, 77). Therefore, the HR policies created can have implications on business in various ways for instance, through production, promotion and selling process. Human resource management is an essential organ of an organization which contributes immensely to the achievement of the overall corporate goals of the company. The HRM recruitment policies should be effective. This will ensure that only people who are suitable for various jobs are employed to contribute to the achievement of the company objectives in an efficient manner
Diversification of its products and services. McDonald's corporation should consider producing new products and services which are unique. This will enable the organization to carter for the changing preferences and needs for it to continue staying ahead of competition in the industry.
McDonald's should take care of its global strategy. The organization has been in operation for many years and has managed to establish itself as a strong competitor in the market. The organization, therefore, should utilize its expansion strategy to exploit new upcoming markets globally. Its products are quick and not expensive and, therefore, they can be afforded by people of all economic classes.
Since the establishment of McDonald's corporation, there have various experiences in the organization; both desirable and undesirable. Presently, its brand is established as the most competitive player in the food industry. A lot of competitors are entering the market with similar products and services, besides, they are also introducing substitute products that McDonald's need to be on the lookout for and improve its overall organization strategy. Various components of HRM such as talent management, recruitment, pay, rewards and performance management are being embraced with serious considerations, and this will impact positively on the company's overall performance.