Managing human resources comprises a range of issues such as recruitment and retention, employee development, reward schemes and promoting good relations with and between employees which are arguably basic HRM functions. Recruitment lays the groundwork for obtaining suitably qualified employees in order to contribute to achieving corporate goals in an efficient and cost-effective manner, (Foot & Hook, 1999). In addition the importance of ensuring the right people are retained has become increasingly critical.
External forces such as demographic trends in the labour market and the internal desires for a multi-skilled flexible workforce are also vital considerations. Beaumont (1993) for example has emphasised the relationship between corporate strategy and people management or the notion of strategic recruitment and retention. The fast food industry though has historically been seen as low-skilled and low paid work leading to a high rate of employee turnover.
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The fast food giant Mc Donald's has improved their pay and career prospects offered in order to recruit and retain staff while Burger King in the UK have launched a bid to improve the fast-food industry's reputation by providing high quality training career prospects, (Walsh, 1998). The new features of the UK labour market such as a more educated workforce and more concerns with an individual's whole career life as well as new legislation requires fast food companies adapt their HR strategies in order to compete in new global and national contexts effectively. It is useful hence to investigate the new features of recruitment and retention strategies initiated by fast food firms in responding to these challenges.
- The first objective of this work is to identify and explore the main challenges faced by retention strategies for staff in the fast food industry.
The influence of globalisation for example has sped up the expansion of multinational fast food companies such as Mc Donald's and KFC in the UK along with concurrent trends for multinational expansion in other industries. This shift coupled with a more integrated and interdependent world economy and marketplace means that fast food firms compete in a fierce environment with concomitant implications for employment strategies in the industry. As Debrah and Smith (2002) argue at the corporate level organisations tend to adopt strategies aimed at increasing labour effectiveness while on the other hand at national level governments are under pressures both to attract foreign investors and improve competitive capabilities of local companies. Therefore multinational fast food companies must balance various interests, needs, preferences and external conditions in the implementation of HR strategies. Identifying these relevant factors then is an important element of assessing the effectiveness of retention strategies.
- The second objective of this work is to examine specific retention strategies exploited by a fast food company both in terms of competing for staff within the UK labour market with other fast food companies and with other industrial/service sectors.
Due to the important strategic role of HRM recruitment is in turn a critical part of corporate strategies towards achieving long term organisational growth. New challenges outlined above require that companies in the industry develop strategies which allow for the recruitment and retention of quality staff in an ever intense competitive environment within the industry and with others in terms of labour force requirements through offering attractive means of retaining employees. This research aims to examine and evaluate McDonalds' employee retention policies such as employee development programs and reward schemes in responding to these challenges and how they contribute to an overall strategically effective HR environment in the company, (Foot & Hook, 1999).
The principal outcomes of this research will be an assessment of the effectiveness of McDonald's employee retention schemes from the perspectives of those directly involved in or impacted by the implementation of these schemes. Additional outcomes of the research include a detailed overview of general trends within the industry in relation to employee retention and development and a comparative analysis of McDonald's policies in relation to other industry players.
The concept of human resource management has emerged from the 1980s into a core consideration of corporate strategy and business research in the 1990s, (Legge, 1995). There is no single definition of HRM in the literature yet the emphasis has to a large extent been on the strategic role of human resource management in organisations. Some research has identified HRM with strategic aspects of 'best-fit' or aligning people to the needs of the organisation as expressed in corporate strategy and others have examined HRM as a means of gaining enhanced organisational performance, (Golding, 2004). However the contribution that human resource may make to an organisation's performance and effectiveness has been linked closely to the changes in different business environments including macro and micro contexts.
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Recruitment and employee development should be viewed as a ongoing reflexive process, (Roberts, 2000). HR applications such as training or reward management to a large extent are associated with efficient strategic recruitment by matching people continuously with the positions they are best suited for. Strategic recruitment is crucial to not only the economic success of companies but also effective adaptations to social contexts, (Rubery and Grimshaw, 2003). Understanding how organisational retention strategies work within a national and industrial context is also important. It has been noted for example that in the UK there is a transfer of 'in house' jobs to outside contractors as well as an increasing shift from public to private firms in certain industrial sectors, (Rees and Fielder, 1992). This has been accompanied by increased deregulation in the labour market with positive effects for companies that are able to capitalise on such developments.
Giles (2000) argues that the process of globalization tends to be viewed as an external economic force that undermines the strategies of an organisation. Also the development of technology has shaped recruitment strategies in terms of decreasing the need for un-skilled workforces but increasing skilled and semi-skilled ones particularly in the operation of complex machinery. Similarly while deregulation has occurred in some aspects in other such as safety there have been legislative developments as well as social threats to employee safety that the fast food industry must take cognisance of, (Frumkin, 2000).
External factors then provide both challenges and opportunities in the management of people. Also internal considerations such as retention of employees have become critically important for organisations in attracting quality staff. Retention strategies can be considered from three aspects: reward, employee development and employment relations.
In relation to motivation organisations have attempted to achieve efficiency by using appropriate systems of payment to encourage and reward employees. Rubery and Grimshaw (2003) argue that payment is the most straightforward means of attracting and retaining staff. Employers also seek to engage the creative and problem-solving capacities of labour including those which are considered low skilled or low paid firms such as fast food restaurants. However payment depends on many factors, some of which are designed by the organisation and some of which are influenced by external elements such as The National Minimum Wage Act. Additionally reward strategies need to include appropriate performance evaluation systems especially where non-monetary rewards may be used, (Foot & Hook, 1999).
Secondly more and more organisations have recognised the value of human capital and the harm of high turnover rates for staff. This means they have invested in training and developing their existing workforce in facilitating their learning within a learning culture, (Collin, 2004). Employee development as part of the HRM strategy means adding value over the long term to the human resources of the organisation. The emergency of a knowledge-based economy requires organisations be more aware of knowledge management. However due to different national educational systems and industrial characteristics levels of employee training vary. For example the non-human technology based fast food industry invests much less than other high-tech based industries and due to the historical reasons employers in the UK tend to limit spending on employee training, (Brewster, Hegewisch & Mayne, 1993).
Additionally the employment relationship plays a vital role in maintaining skilled and motivated workforces, (Clark, 2004). Contracts between the employee and employer determine the terms and conditions of employment like security and health issues related to the job and contractual employment rights. Clark (2004) also points out that the relationship between employees and management teams not only affects the performance of the corporation but also influences the retention of employees. However it has been argued that the usage of information systems in enhancing the efficiency of communication processes contributes to the retention of production line staffs but generates tensions for middle level managers leading to a reduction in the size of this management layer, (Henriksson, 1999).
As Ritzer (2000) describes efficiency in the fast food industry historically has focused on workers being able to perform their tasks more rapidly in order to serve more customers during any given time. Fast food restaurants have responded to this by creating and instituting many nonhuman technologies and routine procedures which anyone with little training can follow which has led to the low-wage low-skilled perception of employment in the industry.
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Control is increased through the replacement of humans with nonhuman technologies and standardised procedures in order to reduce the level of uncertainty and inefficiency caused by people but this has led to very unsatisfying and unrewarding employment, (Schlosser, 2001). This in turn has led to high turnover but continual recruitment for existing bases along with continued expansion have led to high costs for the industry in terms of even providing the minimal training necessary to perform the required tasks.
This situation is one which has been acknowledged by the industry and fast food companies have responded individually in their own ways to this. Coupled with intense competition in the global market between fast food companies which in itself requires an efficient workforce as well as a cost effective one means that the retention of skilled employees has become essential in maintaining competitive advantages in the battle for market share, (Walsh, 19998).
In light of the objectives of this research the overall strategy guiding the project is a case study strategy consisting of in-depth interviews at 4 McDonald's restaurants. McDonalds was selected as being the major industry players its policies can be argued to have knock-on effects on other industry players as they seek to compete with the company in attracting and retaining staff. Case study approaches are particular useful for linking theory with research and when linked with qualitative research can generate rich amounts of data relevant to particular organisational contexts, (Yin, 1994). The overall emphasis then is on qualitative data collection coupled with an extensive literature review and documentary analysis of HR related literature specific to the fast food industry.
Overall the use of qualitative data collection methods will allow for a 'thick' exploration and explanation of the operation and implementation of employee retention and development schemes within McDonalds from the point of view of those directly influenced by or involved in the implementation of such schemes, (Silverman, 2005). This seemed a particularly useful approach over 'thin' explanations generated by quantitative research in terms of assessing on the ground experiences of retention schemes in McDonalds. The main focus of data collection and research is to examine how reward schemes, motivational issues and HR relations impact on the retention of staff in the selected restaurants.
The first component of the research is to conduct both an extended literature review and documentary analysis relating to HR within McDonalds and the industry generally. Thus while the literature review will be used to construct a theoretical framework to position the findings as well as an interpret them the documentary analysis is much focused on learning the workings and practice of employee retention within an organisation through reference to written records on these, (Hart, 1998). Thus the documentary analysis concentrates on memos, minutes of meetings, internal company literature and so on.
This will also help in verifying verbal recollections captured in interview with written records thus providing an internal check on consistency in relation the findings for the research. Examples of documentary material to be gathered include details of the restaurant's pay structure and promotional material related to recruitment of staff especially where reward schemes are used to attract applicants.
The second component of this research is to conduct a series of interviews. Two forms of interviews will be used the first of which are semi-structured interviews and the second are focus group interviews. Interviews are an established method of data collection within business research and the social sciences in general and they are also one of the principal tools associated with qualitative research. Interviews excel at collecting in-depth data by allowing for a discussion to take place between interviewer and interviewee dealing with the topic at hand, (Kvale, 1996). Semi-structured interviews in particular are useful due to their structure. The typical structure for this form of interview is for the interviewer to have a prepared list of questions but also to leave time within the interview for the respondent to initiate and respond to topics as they occur freely, (Drever, 2003).
The semi-structured interviews in this instance will seek to include representatives from the McDonald's restaurants at a variety of levels. It is expected that 14 interviews of this nature will be held, with 10 employees, 5 with less than 6 months experience with the company and 5 with more than a year's experience with the company. 4 additional interviews will be held with managers in the company. Three locations have been selected and interviewees will be selected to from a representative sample of each of the participating restaurants. The interviews will concentrate on collecting data relevant to reward, motivation and relations as outlined in the literature review.
An important series of questions directed at employees will seek to ascertain their thoughts on their future of the company, on whether employment is a short term measure or whether they see it as offering long term career goals. By examining new recruits or those with little experience along with those who have been with the company for a period of time it is expected that useful comparative data of a longitudinal variety will be collected in assessing company retention policies over a period of time. Manager interview questions will be aimed more at how the three elements are managed and implemented within the particular locations and what are managers assessment of and feelings towards the effectiveness of such measures. Manager questions will also seek to explore how managers assess and evaluate broader industrial and social trends in impacting on the retention strategies they employ.
In addition to the semi-structured interviews three focus group interviews will be held at each of the participating locations in the research. It is hoped that at least seven members of staff again with balanced representation in terms of experience of working in the company along with at least one of these being at management level will attend the interviews. Access to any business organisation is difficult considering the time and intrusion which research causes, however the focus groups in this research are constructed in terms of an action research approach, (Morgan, 1999).
This means that the focus groups will emphasise communication between various parties in terms of the effectiveness of employee retention schemes within the respective locations involved in the research and of how the findings of the research can be of use to the participants in the research particularly where problematic issues occur. The aim of the focus group is to explore how internal preferences and needs as expressed by employees mesh with each other to form common trends, how open communication channels are within the particular restaurants and observe management and peer response to problems that are identified internally within the group, (Greenbaum, 1998).
There is however a number of significant challenges to conducting this research successfully and a number of limitations with the research strategy and plan adopted. To deal with the challenges first the most important hurdle will be the gaining of sufficient access and co-operation in conducting the interviews, . There are problems in this regards at two levels, in terms of access management may have concerns over the level of intrusion into day to day operations caused by the interviews. However this can arguably be addressed by sensible timetabling of interviews to cause as little disruption as possible. Similarly access to company records in light of the documentary analysis again will need to address management and organisational concerns over the confidentiality of internal company documents.
However the author believes that by highlighting the value of the research in terms of assessing effective retention strategies and identifying problems with current ones or successful elements that these concerns can be overcome, (Bernard, 2000).
Confidentiality is also a concern for the non-management employees to be involved in the research. Anonymity in the semi-structured interviews will need to be guaranteed and emphasised at all stages of the research especially where there may be the case that difficult relationships exist between the two levels of staff. Bias is also a consideration here as low-level employees may not be willing to engage in criticisms of policies should they perceive management as being aware of the nature of the comments they make.
Such concerns are however not exclusive to this research and are part and parcel of much research within an organisational context, (Bryman, 2003). The researcher believes that by careful emphasis and the building of trust between interviewer and interviewee in the initial stages of the research will be an important factor in reducing this problem and increasing the validity of the data collected.
The focus group however presents especial problems in this regard. The principal concern then is that the inclusion of a management figure in the focus group would lead to significant bias among the non-management interviewees. However frank and open discussion is an important part of many organisational company strategies thus it may be the case that management may already be familiar with situations and with the action research emphasis may be receptive to the context in which it is to take place, (Litosselliti, 2003). Thus trust with management internally in the organisation and trust with the interviewer will be a deciding factor in achieving successful results with the focus group.
All research and qualitative research in particular demands careful organisation and planning for the research to be successful. In this instance as is common with many qualitative research programs a research diary will be kept by the researcher to keep track of important developments or themes as they arise during the course of the research, (Flick, 2002).. Interviews will be taped with the permission of the interviewees or data summarised with note taking if permission is not granted and data from this will be coded using NVivo according to the theoretical framework outlined by the literature review along with the general themes identified within the documentary analysis.
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