The success of the McDonalds Corporation

McDonald’s Corporation is the one of the world’s largest fast foodservice retailer. The business has been in operation since 1940. It currently serves about 47 million customers each day around the world. McDonald’s operates over 31000 restaurants worldwide, employing more than 1.5 million staff (McDonald’s, 2010).

The business has achieved its success through, informal atmosphere and quick delivery system (Ygoy, 2007). (more)

The purpose of this report is to explore the issues regarding high labour turnover faced by certain McDonalds’ restaurants. Labour turnover is movement in people in and out of a job. Further analysing this issue will help to identify achievable strategies that could be put into action to assist in reducing labour turnover. By using best theories and a variety of models, should enable me to provide appropriate recommendations to address this issue.

This report consists of a number of sections. A section comprises of a variety of literature based on topics of causes of high labour turnover, employee recruitment, selections and developments. This should aid me to write this report effectively and address this particular issue well. The analysis of literature review should facilitate me to identify and resolve this issue. With a review of findings and appropriate recommendations will be addressed in order to achieve successful outcomes and this section will conclude this report.

This particular issue has been a concern for among many restaurants of this business and many of its staff and affecting the business as whole.(more)

According to many media, this business is considered as a business which gives many opportunities for young people to develop their careers. However, it is not clear why the business fails to keep its staff for a longer period and provide them opportunities for developments within the organisation. In order to address this problem, this analysis can be important for the business as it offers possible strategies and recommendations for the implementation.

Background of the business

The business was established by brothers Richard Maurice McDonald in 1940. The business is operating in 119 countries serving nearly 47 million customers each day. The business has over 31,000 restaurants worldwide with more than 1.5 million employees working.

McDonald’s assures its employees needs. One of its employment policies is to provide a culture of flexibility, opportunity, equality and diversity (McDonald’s Corporation, 2010). As such, the business is willing to amend its recruitment and selection policies. However, the business fails to keep its staff for a longer period. According to David Fairhurst, chief people officer in the UK “Sixty per cent of McDonald’s 75,000 strong workforces are under 21, while just 1000 are aged over 60” (Richard, 2009).

The business provides a good working environment. The business makes sure that its follows all health and safety procedures set up by Health and Safety Act 1978. Especially in the kitchen when cooking burgers, it makes sure there are no hazards which can harm their employees. McDonalds also provide at least a 45 minutes break and free meal for employees. Employees also get a 5 minutes break for smoking. In each of its stores there is a staff room, with facilities given such as a television and a computer.

Organisational culture

Young workers are the main workforce at McDonalds. The work is mainly done by students working as part time and teenagers looking to improve themselves by working. Therefore the organisational culture has given the image that the work is done mainly by young people. This makes it difficult to the business to attract older staff.

Pay

The business pays a minimum wages according to the Minimum Wage Act () . Also it provides a pay rise every six months according to employees’ performance. However, the rise is not significant. However, the business argues that they employ workers with no experience and provide jobs where they can gain and develop their knowledge. The business pays minimum wages to its staff. Many full time employees say this income is not enough to look after their family or themselves. Also in order to be entitled to get rewards and benefits the business requires employees to work for at least 3 years.

Working patterns

Most of its stores operate using flexible hour working patterns. A store outside London opens from 6.am to 10 pm on weekdays and 6am to 12 am on weekends. Flexible working policies for all hourly paid staff allow changes to shift patterns on a weekly basis (Aurora, 2010). (talk about calling on sick!!)

McDonalds also allows swapping shifts between family and friends who are working in the same restaurant. The business provides opportunity to students employees to work during term time at their college or university town. However, for salaried employees the flexible working schemes sets out a procedure for employees who have achieved a qualifying period of service who have childcare or elder care responsibilities (Aurora, 2010). The business also enables employees to work as part time workers. However, according to a store which operates in Uckfield, the store has a high staff turnover. To cover the shifts staff can be called to work at short notice. Sometimes the managers may phone more 5 employees and asking them to cover the shifts. In most cases the shifts are covered by younger employees as they have fewer commitments. The number of employees call in sick at least 5 or 6 times in week (Appedix)

The business finds this as an issue. In order to address this issue, the managers of the business (who schedule the weekly shift time table) make sure that they always have one or two extra staff every day. However, if a store is not very busy and do not need many staff, then either a few staff may be asked to leave early or the store will experience a high labour cost.

The issue

The business is facing problems in terms a high labour turnover. (mention %).The movements of people in and out of work has a significant effect on the existing employees. This issue is in a straight line with a few considerable factors. Mostly the business employs young people. There are either students working as part time, and young people who do not want to pursue their education. Students will leave the job when go to go university or colleges. Also they are more likely to take holidays during their exams times. For many young people this can be their first job. However, in recent years there are older people wanting to work temporally at McDonalds. This may be they have been made redundant due to the recent economic crisis and working there while looking for another job.

Causes of the problem

There are a variety of problems the business experiences due to the high staff turnover. (refer %) It is also important to analyse why staff want to leave after a short period. The most significant causes have been identified as; pay and internal external factors. However, inefficient recruitment and selection methods can also be the cause for

Current recruitment policy and procedures

Each individual store is responsible for hiring hourly paid positions under McDonald’s recruitment policy. Generally vacancies are advertised in the restaurants. The business also uses other facilities such as local job centres, career fairs and other local facilities. First applicants must apply online. The business has a selection process, which includes an initial online psychometric test. This test produces the initial score based on which successful candidate will be asked to attend a first stage interview. Followed by this, there will be an assessment in a restaurant for two days. Successful completion will lead a final stage of interview, after which the manager will make the final decision on whether or not hire the applicant. However, according to the one of the recruit manager, sometimes they are more interested in candidates’ personality therefore ignore the test. Simply if they like an employee then they will hire him or her. Unfortunately very often they hire the wrong people. In order to reduce the high labour turnover, this aspect of the HR practice must be addressed properly.

The general practices of training and developments to be adopted by the business. However, does not seem to be encouraging employees for developments. In order to develop, appropriate training is required. The business does require its employees to go through certain training and there an ongoing training procedures in place. In terms of development, employees should be given additional support in order to encourage applicants for promotions. This will make their employees stay longer.

HR Strategies to minimise the problem

The Human Resource Management (HRM) function’s improvement is significantly important. This is to make certain that recruitment strategies, selection methods, procedures in relation to trainings and developments are the key aspects to solve or minimise this issue. However, making changes on these four areas can be time consuming and cost the business in the short term. (ref). Most importantly, it is important to solve this issue, by making any changes to the factors which the employees consider as the causes. It is vital to implement appropriate strategies so that it will be beneficial in the long run.

Analysis of available strategies for HR to implement.

The problem can be deduced that the issue needs attention on selections, recruitment, training and developments for employees. A high staff turnover is clearly an issue of concern for the business HR department.

In order to respond to the issue motioned above, it is clear that some changes needs to be implemented in terms of recruitment, selection, development and training. In this situation, the business should consider two vital questions. How they can get the suitable candidate and keep her or him longer in the organisation. In order for employees to stay longer, the business needs to provide appropriate training development opportunities and rewards.

There are a variety of strategies on how to reduce employee turnover faced by McDonalds. By changing or improving the existing policies towards recruitment, selection, development and training can assist the management to tackle this issue. A high labour turnover result due to poor selection procedures.

Providing good working conditions, establishing accountability and making good hiring choices would retain employees at McDonalds. The business does provide a good working environment, however the business fails to take into account of other factors. Studies show that workers who have a greater variety of tasks tend to stay longer in the jobs. Therefore it is important that the business makes should staff are trained properly so that they are capable of doing a variety of work within a restaurant.

The culture of the organisation indicates that the business does offer opportunities to its staff. However, the encouragement towards employee developments is lacking. By encouraging staff especially the non student staff and making them aware of all the opportunities which can help then to progress their career. It is vital to examine closely the merits of continuous development for and to each member of that organisation. It is ultimately the managers or supervisors responsibility monitor this “development of every individual at work is as important as it is to the development of children at school” (Rosemary, 1990 p.71). McDonalds has a variety of opportunities for staff. However, many staff are not aware of this, therefore the business needs to make sure and encourage them to get involved. One of the ways is that managers of a store can provide information, advice for promotion opportunities and information on career progression.

Line managers carry the fundamental responsibility for ensuring that their people are helped to perform their jobs effectively and efficiently. The management of the business can motivate employees to stay longer in the organisation in many ways. Employee engagement, a well designed job role, support and commitments shown by the management team can all have a significant influence on attracting workers to stay in the organisation. A greater pressure from top management to store managers may improve recruitment, and selection. This means the store managers hire new employees they will be more alert the issue business faces.

Literature review and analysis of theories

It is important that businesses should understand what the causes for high labour turnover. By determining whether retentions difficulties are caused by internal or external factors will help the business to take appropriate actions. Pay and performance can have an effect on staff turnover. However, for some individuals pay will not be the sole criterion when people decide to continue within an organisation.

Studies suggest new employees leave after a short period in the job, poor recruitment and selection decisions both on the part of the employer and employee are the key causes. (McDonalds refer) If expectations are raised too high during the recruitment process can result in people accepting jobs for which they may be unsuited. McDonalds invites applicants to work a shift before accepting jobs. However, if applicants leave after one shift this can be a disadvantage to the business as they would have wasted time and resource on training the person. .

Recruitment and selection procedures set out how to ensure as far as possible, that the best pool of candidates are recruited. Recruitment and selection can help managements to determine and modify the behavioural characteristics and competences of employees. Each and every company wants their employees to be well prepared and suits for the criteria on the job. According to Rosemary (1997), job descriptions and personnel specifications will aid the recruitment and selection processes. This means that McDonald’s job description should help the business in terms of recruitment and selection to get the best pool of candidates. The recession, redundancy and unemployment can help employers to gain a large pool of candidates. (Brayan Livy, 1988).

Effective recruitment steps

In order for recruitments to be effective, it is significantly vital that a business understands the type of employees it needs. Another step for an effective recruitment is that to identify potential employees who have the essential skills and knowledge. However, a business like McDonalds, may be more interested in people who the ability to do the work rather than skill or experience. Vital to the success of any recruitment program is the emphasis place upon proper and adequate planning and organisation. Recruitment must identify the current make up of the workforce. This means McDonalds needs to define the target group, identify strategies and resources, and prepare job announcements. McDonalds should also train its existing staff on how to recognize an opportunity to recruit new employees. By implementing this strategy, current staff are used to attract other workers who have similar backgrounds and personal objectives.

Selection Techniques

Section techniques are not same for all positions. Different selection techniques are used based on the nature of positions. This means McDonalds cannot use the same techniques to a managerial and a crewmember position. Choosing the appropriate techniques will aid them to recruit the best candidate to the suitable position. Most of the time the selection techniques tend to be based on the particular skills, attributable and knowledge required to the position. According to Brayan Livy, social skills, intellectual skills and attitudes are key factors for group selection methods. It essential that when McDonalds matches the selection methods with the selection criteria that is required for the position. According to Mullins (2006), the more homogeneous the group in terms of such features as shared backgrounds, interests and attitudes, the easier it is usually to promote cohesiveness.

Selection techniques include assessing written applications, conducting panel interviews, presentations and teams work. (talk in more detail).

There are appropriate selections techniques can be used by McDonalds. Social skills include sensitivity to the views and opinions of others can be important at workplace. Friendliness, reaction to disagreement, the handling of conflict and criticisms are also important factors which the business should take into consideration during the selection process. Also ability to influence and persuades others can be advantage for McDonalds. However, interview should be the main selection technique.

Strategies for successful recruitment

Management’s commitments

Retention

Employees leave because of factors that exist both within and outside of the organisation and controls of its managers. External factors are factors which have a significant influence outside workplace. Factors such as, changes in lifestyles, family demands and other social responsibilities can have affect son jobs. Internal factors within the organisation such as job satisfaction can influence employees work and causing desire to seek a new position elsewhere. (Apply to McDonalds).In order to minimise or resolve this issue, management of the business should keep these factors in mind and trey to make necessary modifications at workplace when required.

Conclusion

The purpose of this report is to identify ways to reduce the high labour turnover faced by some of McDonald’s restaurants. The literature review on labour turnover identifies a range of factors that have direct impact on the business. Organisational commitment, job satisfaction, alternative opportunities are the main causes identified. Evidence on the role of pay has a significant influence. Age, personal characteristics, and other internal, external factors also have an effect on labour turnover. These factors can help the business to understand the general nature and causes. In the case of McDonald, the current retention strategies adopted by the business do not approach the particular problem they face. Therefore different strategies should be approached and implemented.

McDonalds can take a variety of measure to reduce the high labour turnover. Improving remuneration packages can make employees to stay longer at work. Commitments to training and skills development, good management, and developing and maintain a positive organisational culture.

A productive recruitment will only drive just part of what it takes to reduce the high labour turnover. For recruitment to be more effective, the management must establish a positive working environment within stores. Recruitment decisions should not be based on one selection method alone. This is particularly important if a business is seeking to recruit a senior position. However, a business such as McDonalds can use a few methods when recruiting crew members. For instance the business can use work samples as this is a good way assess what a candidate is capable of.

Many studies emphasize the importance of training the recruiters in the development of good interviewing skill that can identify the best pool of candidates. Also helps to create a positive atmosphere that will enhance recruitment efforts and public relations for McDonalds. An informal attitude may not achieve the results needed; therefore ultimately the management of the business is responsible to ensure this.

Solution

By improving recruitment procedures to ensure candidates receive a realistic impression of the company and the job role.

Providing clear career paths, interesting work and support for personal achievements and developments.

Keeping pay in line with appropriate market rates.

Offering attractive employee benefit package

Creating a pleasant working environment

Communicating and consulting effectively with employees.

More promotions options for staff.