The Employment Relationship Principle Of Fast Food Industry Management Essay

McDonald’s has the largest share in the fast-food industry worldwide with a continuous and aggressive expansion that occur either inside or outside the country of origin (United States), without badly affected by the economy of the nation (eds. Royle & Towers 2002). Furthermore, it has opened many franchises worldwide besides its company-operated restaurants (eds. Royle & Towers 2002). This also means that McDonald’s has made a great contribution in employing more than 2 million workers globally with its main focus to maximize sales and profit mainly by minimizing labor cost and wastage (eds. Royle & Towers 2002). The company has a Unitarist approach in which the company views employee representatives (such as unions) as an interferer to the unity of the workplace relations (Simon Fry 2010). It prefers to deal with employee-related issues directly with the individual workers by having its own Human Resource Programme which aims to foster workers’ commitment and satisfaction by promoting individualism, replacing collective representation and negotiation (Beaumont, cited in Tony Royle & Brian Towers 2002). McDonald’s implements Mcdonaldization which follows Taylorism and Fordism principles of production system (eds. Royle & Towers 2002; Undergraduate School of Management 2010, Topic 3). Taylorism focuses on deskilling each work role and division of labor by breaking down the task into simplified, routine and systematic jobs of production in which the workers are allocated to the jobs that they are specialize in (match the workers to the job they are suited to) as well as having each steps of the task to be planned out and calculated in advance, and by giving wages to the workers according to their performances following the piece rate system where workers are paid extra in addition to their standard wage, depending on their performance (Undergraduate School of Management 2010, Topic 3). Meanwhile, Fordism focuses on using standardized maximization of work process through technology to deskill worker and to facilitate mass production such as using assembly line and single purpose machine equipment which can perform many tasks by using only one machine (Undergraduate School of Management 2010, Topic 3; Pereira 2002). In other words, technologies such as machines, equipments, tools and methods used to operate them and the production process are standardized with specific purpose and thus it is understandable and easy for the less skilled workers to use while at the same time, technology helps to improve workers’ productivity, efficiency and effectiveness in producing the output. The interaction of workforce efforts with technology in both methods would bring financial benefit for the company since less skilled and cheap labor would already be sufficient to maintain or produce better quality products through the improvement in productivity of the workforce due to specialization and division of labor as well as mass production with the help of technology, which could produce large amount of output within limited period of time. Therefore, cost minimization and labor efficiency is achieved (Pereira 2002).

Multinational corporations in fast-food industry such as McDonald’s, Burger King, and Pizza hut have expanded worldwide. Regardless of the location of expansion, McDonald’s and other fast-food companies have implemented similar operations in the three countries. The labors are lowly paid with limited experience or skill to work. Generally the workers are exploited in order to achieve the main company’s goal of minimizing labor cost. Besides, the workers receive poor employment conditions and minimum employment benefits. For example, Taco Bell managers were found to force the workers to work overtime and yet they were unpaid, purposefully making the workers wait until the restaurant was busy before they were allowed to start working and expecting staff to clean the restaurant during their free time (Schlosser cited in Allan, Bamber & Timo 2006). They generally have little awareness and understanding about employment representative such as work councils or labor unions and their rights as employees (Royle 2002). In other words, the company is an anti-employment representative, having a Unitarist mindset and they established their own Human Resource Management Programme to deal with workers directly instead of allowing external parties to interfere (Pereira 2002). The company always tries to avoid working with trade unions or work councils whenever they can and wherever they are, this shows how much they resent employee representatives and employee representatives are bad and intruders have been engraved in their perspectives. For example, in German McDonald’s use buy-out strategy to lay-off workers who has shown interest in work councils by paying a high compensation fees and do not hire anyone who has interest in work councils (Royle 2002). Royle (cited in Allan, Bamber & Timo 2006, pp. 402-440) stated that “In most countries, employer’s anti-union policies (and weak enforcement of union membership as it is optional to join) generally result in low levels of unionization in the industry and thus, little collective protection (or representation) for (fast-food) workers” and “…not much protection from unilateral managerial action” (Allan, Bamber & Timo 200). This means that the employees have little or no say in company’s decision-making affects them or to negotiate over the employment terms. The workers are mostly part-timers, with short time work commitment towards the company since there is little opportunity to advance in their career when they work in McDonald’s, causing a high labor turnover (Pereira 2002). The company will only change their policies when they are triggered by the external environment such as public criticism or for their own benefits, but will not respond to internal pressure such as the complaints and dissatisfaction of the workers. This can be seen through McDonald’s and other fast-food employers in German in which they have agreed to create collective agreement with work councils mainly because it receives many criticism from the public about its strong resistance to work councils (Royle 2002) and ‘to position itself as a clear leader in its own sector…to be seen as setting ‘high standards’ ‘ (Royle 2002, pp. 76-101). The production process and methods, training, the equipments used and the tasks assigned to the workers are similar and standardized in the three countries (Royle 2002; Pereira 2002; Leidner 2002). The laws are pro-employers in which more power, freedom and minimum restrictions are given to employers to negotiate terms of employment directly with employees rather than negotiating through unions (Pereira 2002; Leidner 2002), especially in US where ’employment-at-will’ exist, in which workers have no right to ongoing employment and employers have no legal obligation of fairness’ . There is also a shift in the market for searching labors to expand the recruitment efforts due to shortage of workers. In Singapore for example, there is a shift from predominantly young workers to elderly workforce while in US the poor single mothers and handicapped citizens are now being employed to meet the need for workers in the companies.

Despite many similarities in the employment practices across the three countries, there are also some differences found. In Singapore, the workers are predominantly the elderly while in Germany they are immigrants and foreigners, with United States(US) having predominantly young women in the workforce (Royle 2002; Pereira 2002; Leidner 2002).In Singapore and Germany, McDonald’s are not pressurized to cooperate with labour unions since it is optional to join while in German, it receives strong continuous pressure to cooperate with labour union or work council as it is legitimate in the country (Royle 2002; Pereira 2002; Leidner 2002). The workers in Singapore are generally satisfied with the treatment from the employers and do not feel exploited or underpaid as they expect to be lowly-paid. However, in German and US, the employees raised dissatisfaction due to exploitation of their working time, efforts and payment along with unsupportive management, although US workers also expect and accept the low wages. In Singapore and US, the government allows the companies to retrench workforce anytime when they need to in times of crisis and in US it goes to the extreme that the employers can fire the employees anytime for no reason. While in German, there is law to protect workers for wrongful dismissal. However, the time for compensation to be given to the retrenched employees are taking too long that by the time they are offered compensation, the employees areno longer interested. McDonald’s in Singapore receives a positive image from the public and government for their contributions in creating jobs for the elderly to give financial support to them. However, in Germany and US McDonald’s and other fast-food giants receives a bad image for providing unhealthy food, poor employment conditions, and in the case of German, being a strong resistance to work councils.

In my opinion, there is a need to strengthen the labor unions to balance the power between company’s control and labor unions efforts to protect workers’ rights. This is to ensure that the company does not exploit their workers and improve their satisfaction on the employment condition and policies. If the companies in fast-food industry continue to exploit their workers, there will be little progress in the future development of labor market regulation and trade union since the companies may continue to use their strong power to decide what is best and benefit the company and not the workers, creating further dissatisfaction in future. Thus, external parties such as public policy needs to interfere in the company practices to control employer’s resistance to employment representatives such as work councils and trade unions. Furthermore, these representatives should put in more effort to encourage the development of a more positive organization’s employment strategies and practices by find common grounds with the company to come to a mutual agreement on employment policies and practices for the best interest of the workers and company. For example, there is an agreement created to allow worker’s rights to participate and influence the decision-making of company which affects them and gives them a reasonable amount of freedom to express their opinions, ideas and dissatisfactions, provided they are expressed in a positive manner such as by writing in the employee surveys instead of having a strike. This means that there is more employee participation in the company, such as having work councils that are initiated by either government, unions or employees and the company could benefits and improved by adopting some suggestions from workers to improve the company as a whole. The companies should also try to improve the working conditions in ways such as having a regulation of work schedule or rewarding employees based on their performance and efforts to motivate them to work. In this way, McDonald’s who have a relatively negative image could improve their global image in the eyes of public by showing more attention and care to the workers. The company could encourage more employee involvement. Employee involvement is initiated by the management which aims to improve loyalty and supports of workers to achieve organizational goals. This involves communication of performance to employees such as using employee reports, delegated decision-making such as team working and quality circles to bridge the gap between managers and workers as well as financial participation such as profit-sharing which encourage a sense of belonging and commitment to company. All of these positive employment relations practices may be able to create a better workforce who will be more motivated and committed to the company for a longer period of time since their welfare are protected and they are allowed to have some rights and privileges.

In conclusion, fast-food industry has created a huge impact on employment practices worldwide. Especially for large corporation such as McDonald’s, it has created jobs for many workers globally. With the improvement in employment relations practices, these large corporations could prosper further with a more positive image regarding their contribution to the welfare of the workers. Powerful multinationals corporations such as KFC, Burger King, and McDonald’s have a standardized and global model of employee relations that are homogenous across the globe which involve the homogenous organizational structure, management practices, technology and employee relations.

McJobs based on the management principles of efficiency, calculability, predictability and control (Ritzer, 1993)

 McJobs are simplified, standardised and routinised. Such work is generally seen as routine, dull and deskilled. 

Undergraduate School of Management, 2010, Employment Relations Course Notes from BUSM 1084, ‘Topic 2 – The Nature of Employment Relationship’, RMIT University, Melbourne.

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