The Effect of High Turnover on QuickServe Restaurants

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Introduction

QuickServe restaurants include different varieties of meals and drinks such as burgers, pizzas, sandwich, coffee, etc and these restaurants are spread out all world. QuickServe restaurants are some of the most famous restaurants in the world namely McDonald, Burger King, Subway, Pizza Hut, Starbucks, etc. From Human Recourse Management (HRM) point of view, the Quick Service industry offers part time jobs and full time jobs, mainly for the younger generation and most of the time it is considered to be a stepping stone of these youngsters.

QuickServe restaurants have high public profile, due to their location which is normally in high populated areas, but also because of its reputation for providing a consistent and high-quality product. The training system in Quick Service industry has lots of opportunity for future development. Using the assistance of McDonald's case study, there are several issues in QuickServe restaurants that have been mentioned and to resolve these issues a campaign has been developed. The campaign is divided into three main parts: defining main aims of the campaign, main themes of the campaign and means to get the message across. In addition there will some measures explained to help in the success of the campaign

Main Problems and Important Priorities of Strategy

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After careful examination of "Employer Branding" case study and McDonalds as an example, writers considered that there are some issues appeared in quick service industry. Having identified some of the main problems of Quick Service Industry, it has become clear that new approach is needed if a target for recruitment of trainee managers is to be met over the next five years. In order to resolve issues which industry faced, researchers would like to develop an HRM strategy for quick service industry.

First of all it is necessary to define a term "McJobs". McJobs is a job, usually in the retail or service sector, that is low paying, often temporary, and offers minimal or no benefits or opportunity for promotion. (The Free Dictionary, 2008). In addition the term McJobs was defined by the Canadian novelist Douglas Coupland in his 1991 novel "Generation X" (Coupland, 1991); He used McJobs term to describe "low-prestige, low-dignity, low-benefit, no-future job in the service sector" and its increased usage in everyday language lead to the term being entered in dictionaries.

As it was mentioned before, researchers faced with some issues regarding the term that affected the entire industry. Researchers have defined three most important issues in quick service industry. One of the main problems is turnover in the companies. Turnover is kind of the ratio of workers in a QuickServe Restaurants that have been replaced over a period of time, to the average number of workers (London South East, 2010). The percentage of turnover in quick service industry is quite high. The reason of high percentage is that the companies can not keep their staff. The thing is that the average age of people who works in this industry is 18 years old. Mainly they are undergraduate students and usually they stay with a QuickServe Restaurants no more than one year only. These factors directly influence the turnover ratio in quick service companies.

The second problem of quick service is the term and definition of McJobs. As it was mentioned before such kinds of jobs are associated with low paid jobs and jobs without any career development opportunities, thus the level of turnover is quite high. The thing is that the term McJobs is the highest barrier for improving quick service industry. The definition of McJobs affects not only McDonalds restaurants but also whole the industry of quick service all over the world. It took global size of the issue which appears in different countries and regions. There are several negative factors of McJobs. The thing is that such kind of jobs can provide only a little chance and future opportunities for promotions and career development. This factor directly influence on willingness to join the QuickServe Restaurants who works in quick service industry. The training system is developed not in a good level; as a result it doesn't guarantee future opportunities for development and career progression. For example there is no possibility that after successful completion of training in McDonalds the person will be able to find new job not associated with McJobs term. In addition these kinds of jobs don't request high level of skills and experience. This factor plays as negative role for stuff selection as a negative. The thing is, for undergraduate students it would be easy to find job in quick service industry because they do not request high salaries and they are easy to train. The negative side of this factor is that is costs quite a lot of money to recruit new staff and train them. That is why for quick service would we very good to change the image and definition of McJobs.

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The next problem we faced in quick service industry is recruiting. The most easy definition of the word recruiting is given in the online business Dictionary: recruitment is process of identifying and hiring best-qualified candidate (from within or outside of an organization) for a job vacancy, in a most timely and cost effective manner. (Definition of Rectuiment, 2010). There are some positive aspects of McJobs. For example during the recession is gave lots of job opportunities, but again it didn't guarantee proper wages and career development. In July 2001, BBC News reported about the incredible incident happened with McDonalds restaurants in the USA. They think is that QuickServe Restaurants were employing young children (aged from 14 - 16 years old). The thing is that children aged 13 - 16 years old can work only 12 hours a week and must be registered with the local education authority, regarding the US law. In January child employment officers visited the restaurants and found that none of the young people had work permits. (BBC, 2001). In quick service industry, the employers are should be responsible for things like law.

Based on factors and problems bellowed researchers have developed the strategy which would help quick service industry to improve and possibly to change the definition of McJobs which would directly affect HRM and companies.

Aims of the Campaign

QuickServe Restaurants are some of the most famous and loved restaurants in the world but even with having a good brand image with respect to customers they still have several issues that are deteriorating the image of these restaurants and these issues are specific to the image of the jobs that customers and employees have towards the companies, and due to this issue the employee turnover of the QuickServe Restaurants are sky rocketing. The aim of the campaign is to restore the brand image of the QuickServe Restaurants by reducing the huge turnover rate and at the same time trying to actively contribute ideas towards changing the definition of the term McJobs.

Themes of the Campaign

Based on the aims mentioned before there are several themes that is incorporated in the campaign for QuickServe Restaurant. These themes will help to not only create a campaign but also create a strong strategy for the future of the QuickServe Restaurants. As mentioned before the main issues of a QuickServe restaurant is the turnover ratio which for the hourly employees is above 145% and management is 42% in the year 2008 thus causing a $22 billion dollars loss for the companies (Atkinson, 2008). Employee turnover is basically a comparison of the total number of employees that have been recruited to replace the ones that resigned for a given period of time to the average total employees in the QuickServe Restaurants (Beam, 2010). The whole purpose of this campaign is to reduce turnover and to change the brand image among employees and customers.

The themes that will help in the campaign and QuickServe Restaurants are Corporate Social Responsibility, Recruitment & Selection, Training & Development, Appraisal and Benefits. Each of these themes will be explained below, in addition recommendation to which the restaurants can use to solve the issues and how would these recommendations help them.

Corporate Social Responsibility (CSR) is the contribution towards the economy, environment and social sustainability of communities with the help of various stakeholders (Baker, Corporate Social Responsibility - What does it mean?). CSR is considered to be one of the most important factors that influence a company's existence and thus there are some key players that have a direct or indirect influence on the CSR these are government, NGO's, local communities, unions, employees, shareholders, customers, and financial analysts, the diagram below will explain what effect each of them have on a company.

Figure : The Business in Society.

Diagram of the business in society

(Baker, Corporate Social Responsibility - What does it mean?)

This figure give use an idea of the different factors that these stakeholders influence in relation to CSR. The real motive to choosing CSR as one of the opening themes is the magnitude to which CSR can influence a company as almost every problem of a company can be solved or reduced only by focusing on CSR. In terms of employee turnover, CSR could be a vital factor to reducing the large turnover as the figure has mentioned employees and unions to be a factor influencing a company's CSR. So to increase turnover with the use of CSR the QuickServe Restaurants need to try to anticipate the needs of employees and try to motivate them to work of the company. Environment and social sustainability can easily be incorporated to attract new employees at the same time give existing employees to stay with the company. In relation to environment QuickServe Restaurants have a very high waste creating rate thus the company could take this initiative by becoming friends of the environment by purchasing recycle bins and educating the employees to the benefit of recycling the waste, thus getting them involved in promoting of environmentally activities such as cleaning of beaches and planting of trees. These activities will not just help motivate the employees but also get the local community to take notice of the activities and at the same time attract possible employment prospects.

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Another such activity would be the community service as most of the QuickServe Restaurants make large amount of money from the local community thus it would be extremely wise for these restaurants to give some of that money back to the community by feeding the poor their famous meals such as Big Mac, Mushroom & Swiss Thickburger, Buck Double, etc., this will not only help change the brand image of the company but at the same time get the government to take notice which in long term will help to give the restaurants tax exemption. CSR as mentioned in the beginning is a very strong theme for any organisation and if done right will attract a wide section of the population to the companies as customers and employees.

Recruitment & selection plays a major role in a company's employment turnover as choosing the right people for the job can easily reduce the number of employees leaving the company. Recruitment and selection in simple terms refers to the activity of hiring candidates or job seekers for the purpose of employment in an organisation (eHow Contributor). Recruitment is the first step of hiring a candidate and is extremely vital to know what kind of candidate will fit a specific position, thus in specific to QuickServe jobs or McJobs most of the employees are students or young blood thus it is very important to focus most of the funds and time on university. An advantage for McJobs is that the target market which at present is the Y Generation look for quick money and easy jobs. QuickServe Restaurants offer both the above mentioned choice of Y Generation students thus rather than waiting for the students to come to them these organisation should regularly have campus recruitment as this will help to continue the flow of willing employees but the story does not end here as it is also important to select the right candidates and not to just recruit students because they are willing to work for a small wage but to see if they are willing to grow in the company and see if they could bring any benefit to the company. Y Generation may be ready to work to earn fast money but they also have a tendency to change jobs quicker than the other generations thus it is vital to notice what is the purpose of them willing to work for you as may be this may not be a large population of students who are prepared to grow in a QuickServe Restaurant but at least they will find few who would be ready to take their work a little further than being a cashier or waiter and instead develop to become future managers of the companies.

The next theme is the training and development which is the process that helps to increase the knowledge, improves skills and incorporates good attitudes and behaviours in an employee (Compare Infobase Limited, 2007). After recruiting and selecting the right employee it is important not to stop there but to see that they get the right training for them to work well in the company. McDonalds for example is believed to have one of the best training program but according to Fortune500, McDonalds is not considered to be in the top 100 employer of choice but instead Starbucks made the 93 spot for the year 2010 (Fortune500, 2010). Thus this means that even though they have a very good training and development program they are not able to attract the employees to stay and develop themselves. The reason behind this could be that McDonalds is focusing all its training and development on what would be advantage to them but instead they should focus on the needs and requirements of the employees. They need to remember that most of their employees are university students and that the training that they offer is only helpful for them at work and has absolutely no advantage to their study life thus QuickServe companies like McDonalds, Burger King, Hardees, Starbucks, etc. need to try to develop a training program that are more of a managerial level such as communication skills, presentation skills, management skills, etc. This will not go to waste as there would always be a possibility for some of them to be future managers or supervisors of QuickServe Restaurants. There is one drawback of this and that would be the cost of training but in long term this would end up reducing the cost of turnover which at this point of time is higher than the amount spend for training by a big margin. In terms of development the only way to see that this is going in a proper and no bias way is to implement Performance Management System (PMS) which is a system that is created for the purpose of seeing that the employees work to the best of their abilities and help the employees to grow in the company (Heathfield). PMS is a critical section in the development process as with a good PMS the turnover of a company could fall by a huge margin. To be more specific the best recommendation for improving PMS would be to have online tests for employees every year, customer satisfaction card and customer satisfaction box, for the purpose of not repeating it each of these recommendations will be explained in a future section.

The final theme for the campaign is the Appraisal and Benefits; appraisal is the evaluation of an employee's worth, value or quality in an organisation (BusinessDictionary.com) and benefits is the extra help or assistance that an organisation provides to their employees in addition to the salaries and wages that they receive (Farlex Inc., 2010). Both of these themes have a big influence on the employee turnover and have a direct effect on the increase and decrease of it. QuickServe Restaurant do not focus on appraisal and only confront the employees when there is an issue created by the employee as these jobs are considered to have very less rate of having a mistake to occur as there is already a process put in place to reduce these mistakes that is the reason that most of these restaurants do not need Chefs to do the cooking as an automated machine does the work for them. But this does at no point mean that there is no reason for appraisal as this is still a service oriented organisation and seeing if the customers are taken care of is extremely vital thus there is a need for the managers to have an appraisal every year at least so as to inform how are the employees performing and if there is anything they should or could improve. Another reason for doing appraisal is that it has an influence on the employee's motivation as they would always appreciate when the managers take interest in their work and try to improve them for the future. In terms of benefits most of the Quick Service Restaurants offer decent benefits and the matrix below will help understand it.

Table : Employee Benefits for QuickServe Restaurants

QuickServe Restaurants

McDonalds

Burger King

Hardees

Health and Protection

Medical, Vision Supplement, Dental, Spending Accounts, Short & Long-Term Disability, Employee & Dependent Life Insurance and Travel & Business Travel Accident Insurance. (McDonalds, 2010)

Medical Coverage, Dental Coverage, Company-paid Life insurance, Vision Coverage, Short- and Long-term Disability Coverage, Flexible Spending Accounts (Health and Dependent Care). (Burger King, 2010)

Comprehensive Medical/Dental/Vision Care Plans, Part-Time Medical Insurance Plans. (Hardee's Food Systems, Inc., 2010)

Pay and Rewards

Base Pay, Incentive Pay, Long Term Incentives, Recognition Programs and Company Car Program. (McDonalds, 2010)

401(k) Savings Plan with 6% match (Burger King, 2010)

Holiday Pay, Paid Vacation, Paid Sick Time, Employee Meal Discount and Pay check Direct Deposit/Pay Card. (Hardee's Food Systems, Inc., 2010)

Investing in Your Future

Profit Sharing and Savings Plan, Mc$ave, MCDirect Shares, Credit Union and professional financial planning services. (McDonalds, 2010)

On-The-Job Training for Promotion Opportunities and Employee Stock Purchase Plan. (Hardee's Food Systems, Inc., 2010)

Balance Your Work and Life

Vacation, Holidays, Anniversary Splash, Sabbatical Program, Short Fridays, Leave of Absence, Alternative Work Approach, Adoption Assistance, Child Care, Educational Assistance, Matching Gift Program, Employee Resource Connection, International Fitness Club Network, Auto and Home Insurance Program and Beyond Work (McDonalds, 2010)

Tuition Assistance (Burger King, 2010)

Education Reimbursement. (Hardee's Food Systems, Inc., 2010)

The table above clearly gives an idea of what kind of benefits QuickServe restaurant offer to their employees and we can also differentiate the best from the rest as McDonalds has the most amount of benefits offered to their employees and this intern should be considered by other QuickServe Restaurants as if McDonalds is able to offer good benefits so should they be able to do so. Improving the benefits will automatically reduce the turnover of a company, in addiction improve the brand image and help in the cause of changing the definition of the kind of jobs they offer.

Getting the Message Across

Knowing what is needed to be done is not enough instead it is also important to know what means should the company take to put forth the campaign. There are several ways to do so some of the most effective and suitable means are given below:

Internet Site

Social Networking

Recruitment Events

Word of Mouth / Brochures

Each of the above mentioned means will affect different themes as each of them will and should be used for a specific theme so to attract the employees in a more effective way. The matrix below will help to make the explanation more specific and easy to understand.

Table : Effect of means on the themes

Themes

CSR

Recruitment & Selection

Training & Development

Appraisal & Benefits

Means

Internet Site

Good

Good

Good

Good

Social Networking

Excellent

Good

Bad

Bad

Recruitment Event

Good

Excellent

Good

Good

Word of Mouth / Benefits

Good

Excellent

Excellent

Excellent

The matrix is divided into two categories mainly means and themes, the use of excellent, good and bad have been used to see the effect each of the means would have on every theme. In terms of internet site has good influence on every one of the themes as internet site may not be the most effective mode to attract employees but if is a very good means to motivate the current employees to know what the company is doing for them and how in return could they be involved in the company's growth.

In relation to Social Networking this could be an excellent source to show the company's corporate social responsibility and good to attract possible new employees but is extremely bad to use it for advertising your training & development and appraisal & benefit strategies as this could easily be misused by competitors and also social network users. The QuickServe Restaurants can use this to great advantage by even creating their own social networking site for employees and managers so that this will help understand problems and issues they are facing and at the same time motivate employees towards the organisation and will increase the esteem need mentioned in the Maslow's Hierarchy of Needs.

The next means which is recruitment events would have some influence on CSR but when it comes to recruitment this would be the best means to attract possible employees and would be good to explain the possible employees what training & development and appraisal & benefits would they receive while working for the company. These recruitment events do not need to be only for the purpose recruitment as in case of using it for CSR the companies could organise shows as well like getting famous people to perform e.g. Bryan Adams, Jackie Chan, Sting, Mika, Yelle, Bob Sinclar, Eminem, Kobe Bryant, etc. this will attract easily if not millions then hundreds of thousands of people to the event.

The final means is the word of mouth which according to recent research is the most effective mode of advertising and marketing as people would rather believe in what other say about a thing than the companies themselves. Focus on what the employee think about the company would be crucial to flowing a good word of mouth so it is extremely vital for a QuickServe company to see that the employees are happy with the working environment of the company and culture & ethics should also be in the agenda as no two cultures are the same and each of these cultures think of a company different take the example of McJobs as U.S.A. and U.K. consider these jobs to be low paying, low skills required and having very little opportunity for promotion this spread mainly with the use of word of mouth and now almost everyone in U.K. & U.S.A. think of these jobs in that way thus QuickServe companies should use this same means to reverse the term by conveying what are they offering their employees through the employees. Word of mouth is good for promoting CSR but it could be extremely effective for Recruitment & Selection, Training & Development and Appraisal & Benefits as with the help of current employees the QuickServe companies can attracts friends and families of these employees and in return offer some extra benefits to them and their families like stock, commission, etc. This in return is very cost effective and would really not only help to attract potential customers but also motivate existing employees and reduce the percentage of turnover.

As a whole every one of the above mentioned means have good effect on the issue of turnover and McJobs but it is important to implement it properly as this could also have a negative impact on the companies and may even make things worse for them.

Measures to the Success of the Campaign

In order to assess whether the campaigns succeed or not, the analyst develop five kinds of measurement.

The first one is Mystery Shoppers. Mystery shopper "provides management a method to quickly yet efficiently evaluate their business practices, deliverables, and employees from the perspective of a non biased consumer." (Pearce, 2010) Beside that, it can also evaluate the knowledge of the employees and whether the process follows the standard as well, for example, whether they greet to the customers before taking order and use proper honorific during the whole procedure, which can help to assess the Performance Management System(PMS) as well as Training and Development (T&D) of the QuickServe Restaurants. According to the Service-Profit Chain which is "a powerful phenomenon that stresses the importance of people - both employees and customers - and how linking them can leverage corporate performance" (Kotelnikov, n.d.), there is a relationship between customer satisfaction and employee satisfaction. When the satisfaction of employees is high, it will reflect on the service they offer to the customer which will influence the satisfaction of the customer (James L. Heskett, 1994)

Associate Opinion Survey (AOS) is another way to measure the PMS and T&D which is requested to be completed online by every employees at the middle of every year. The survey aims to measure the satisfaction of employees and the employees can also give their suggestion to the QuickServe Restaurants to help to improve the campaign and the job itself. If the suggestion is adopted, the employee

Every year, all of the employees in the QuickServe Restaurants have to take an online multiple choice test about their knowledge of their job like "What ingredient is not included in Big Mac" or "How long should French Fries be cooked", for examples. Every employee will get their own account number but only the managers of each sector have the pin to access to the system. The employee will do it one by one after their shift under the supervision of their sector managers. The questions of the test include every aspect of different positions which would be selected randomly, that means the employees should not only know the knowledge of his own job, but also should know other jobs' description and knowledge in the QuickServe Restaurants, which lays a foundation for selecting potential managers in the future.

The fourth one is to offer casual meeting. There are two kinds of casual meeting, one can be called shift training since it is held before every shift, which can improve T&D, and the other is monthly gathering which follows Company Social Responsibility and can increase the motivation and retention of the employees. Shift training is the meeting to conclude the good performance in the previous day and the defects as well. According to the conclusion, a new daily objective will be set and a short pertinent training will be offered based on the objective. For examples, if the sale of set meals is not good in the previous day, the objective of this day could be set a number of the set meal being sold and then to train the employees how to promote this set meal in a proper way. Through the cumulative day by day, employees can learn much more in kind of practical training than in the theoretical training. Monthly gathering is a kind of incentive that the QuickServe Restaurants can organize an outing every month to motivate employees and build the team spirit at the same time. During the gathering, the supervisor can talk to the employees in a casual way to know the satisfaction of the employee with their job so that the QuickServe Restaurants can improve it in the future.

Last but not least is to place customer satisfaction cards in front of every counter. Customers can write anything they want like suggestions, praise, etc. on the card, which is a kind of appraisal that can help to measure the PMS. Another similar way is to set assessment for each employee. Each of the employees will have two boxes, one stands for "good" and another one stands for "to be improved". Once the customer pays, he will receive a plastic coin to put it into one of the two boxes to evaluate the general this service offered by the employee. At the end of every month, the employee who gets the most plastic coins can get one more weekly salary. "Motivated people perform better." (Chapman, 2010) The more employee is motivated the better job he will do, which can improve the service quality as well to increase the satisfaction of customers.

Conclusion

QuickServe restaurants play a big role in the growth of a country's economy and their success means the country's success. QuickServe restaurants also play a huge role on the unemployment of a country as they help in the growth of employment, thus an increase in turnover is not really good for not just the QuickServe Restaurants but also the country, so this campaign presented in this assignment is trying to help reduce the turnover of the QuickServe restaurants at the sometime decrease the unemployment of countries. Companies like McDonald, Burger King, Subway, Pizza Hut, Starbucks, etc. have a lot to do to reduce the turnover but this can only happen if they themselves see the problem in the way they are working and should also understand that different countries and cultures have a different ways of working and they should do their best to be flexible to various cultures.

QuickServe restaurants have a bright future but walking hand in hand it the various stakeholders is extremely important especially employees as they have the most influence on an organisation and if employees are unhappy then the customers will also be unhappy and this will have a direct influence on the existence of the restaurants. Thus the purpose of this campaign was directed towards assisting the employees and to improve their working environment.