Compensation Management at Mcdonald

COMPENSATION MANAGEMENT AT McDonald INTRODUCTION The McDonald’s Corporation is one of the most successful global restaurant chains around the world. They have used effective management and global expansion strategies to enter new markets and gain a share of the foreign fast food market.McDonald's is not just a burger company serving people; they are a people company serving burgers. McDonald’s strategy of standardizing their products on its preparation, techniques of presentation along with the adaptation strategy has created a difference in McDonald’s as compared to that of its competitors.

McDonald McDonald's success is built on the highest standards of quality, service and cleanliness delivered to customers in each of its restaurants. Well-trained crew and managers are the first step to achieving these standards. It is company policy to provide career opportunities that allow employees to develop their full potential.   McDonald's restaurant is structured as an independent business, with restaurant management responsible for accounting, operations, inventory control, community relations, training and human resources.

Vision: "McDonald's vision is to be the world's best quick service restaurant experience. Being the best means providing outstanding quality, service, cleanliness, and value, so that we make every customer in every restaurant smile."

Mission: • Be the best employer for our people in each community around the world • Deliver operational excellence to our customers in each of our restaurants; and • Achieve enduring profitable growth by expanding the brand and leveraging the strengths of the McDonald's system through innovation and technology.

McDonald’s began its journey in India in October 1996. The average McDonald's restaurant employs as many as 40 people - from crew to the restaurant manager. As of today, they employ close to 2,500 people in India.McDonald’s has over 30,000 local restaurants in more than 120 countries 70 percent of our restaurants worldwide are owned and operated by independent, local businessmen and businesswomen.

McDonald's recruit people through various means including advertisements, campus interviews, people referrals, placement agencies, Internet etc. McDonald's Training is a combination of on-floor and classroom training provided through our Learning and Development Team with exposure to the various aspects of the business.The applicant attends a first stage interview and is offered "On Job Experience" (OJE). This is a 2-day assessment in a restaurant. Successful completion at OJE will lead to a final interview, after which the manager decides whether or not to hire the applicant

MCDONALDS ORGANISATION STRUCTURE:

McDonald’s Wages and Salary Administration: McDonald’s is an equal opportunity employer. Rates of pay and conditions of employment are established and granted without regard to race, color, religion, age, gender, national origin, disability, or ancestry. However Average mcdonald's worker salaries can vary greatly due to company, location, industry, experience and benefits Most employees are paid by the hour and are referred to as 'crew members'. Other “hourly-paid employees” who work alongside them include Training Squad Members, Dining Area Host/esses, Party Entertainers, Administrative Assistants, Security Co-ordinators, Maintenance Staff, Night Closers, Floor Managers and Shift Running Floor Managers. These employees carry out more specific job functions and to ensure the restaurant runs efficiently. The remaining restaurant-based employees are salaried managers. There are two types of managers each has a wage that reflect their responsibilities “Swing” “Salary”

The manager with most seniority present during the working hours is responsible for the entire store., Swing managers may represent the store in absence of a Salary manager including work hour scheduling and task assignment. Only Salary managers may distribute pay or deal with an employee’s pay . Entry level positions (part and full time) start at minimum wage with possibility of a raise every six months.If, at entry level, the candidate elects a “work any time” work schedule.

Pay and Rewards McDonald pay and rewards program follows a "pay for performance" philosophy: The better employee results, the greater pay opportunities.

Base Pay McDonald's maintains the competitiveness of base pay through an annual review of both external market data and internal peer data. McDonald's has a broadbanding compensation system. Broadbanding allows for flexibility in terms of pay, movement and growth.

Monetary Incentives:

The McDonald's Corporation Incentive Plan was established November 1, 1993. The Plan shall be administered by the Compensation Committee of the Board of Directors of the Company (the "Committee").

Incentive Pay Incentive pay provides employees with the opportunity to earn competitive total compensation when performance meets and exceeds goals. For McDonald's corporate, division and region offices, the Target Incentive Plan (TIP) links employee performance with the performance of the business they support. TIP pays a bonus on top of employees' base salaries based on business performance and their individual performance.

Long Term Incentives Long term incentives are granted to eligible employees to both reward and retain key employees who have shown sustained performance and can impact longterm value creation at McDonald's.

Non- Monetary Incentives McDonald's encourages employees through many effective ways. Except the base pay, McDonald's establish competitive wage and promotion programs such as the 'Employee of the Month.'

Recognition Programs Recognition programs are designed to reward and recognize strong performers. For McDonald's corporate, division and region offices, these include the Presidents' Award and the Circle of Excellence Award .

Company Car Program Company car program provides eligible employees with a company car for both business and personal use. If eligible, employees can choose from a variety of

vehicles, depending on their level within the company. The program covers the cost of insurance, maintenance and repair.

McDonald's Employee Benefits The following information highlights McDonald's benefits for Staff e.g., home office, division or region office.McDonald's benefits program is designed to attract, retain and engage talented people who will deliver strong performance and help McDonald's to achieve their business goals and objectives.

Health and Protection McDonald's offers three Preferred Provider Organization (PPO) medical plan options McDonald's medical plans cover preventive care, including annual physical exams for employees and their family members. ♥ Vision Supplement - Employees enrolled in McDonald's vision supplement plan, are provided coverage for eyeglasses and contact lenses, and discounts on Lasik laser vision correction surgery. ♥ Dental - Dental plan allows employees to see the dentist of their choice and covers a wide range of dental services. ♥ Short and long-term disability -. Short term disability provides benefits if an employee cannot work for more than 10 consecutive days. Long term disability coverage replaces 60% of the employee's monthly base salary while he or she is disabled. ♥ Employee and dependent life insurance - McDonald's provides basic life insurance of two times the employee's base salary at no cost to the employee. In addition, employees can purchase additional life insurance coverage for themselves ♥ Accidental death and dismemberment insurance - AD&D covers employees if they die or are seriously injured in an accident. McDonald's provides AD&D coverage equal to two times the employee's base salary.

♥ Travel and business travel accident insurance - McDonald's provides travel accident coverage of two times an employee's base salary at no cost to employees for employees traveling on company business. Depending on the employee's position, this coverage amount may vary.

Investing in Future Taking care of employees current and future financial needs can be challenging. That's why McDonald's offer the following savings and money management programs:

Profit Sharing and Savings Plan Profit Sharing and Savings Plan lets employees save from 1% to 50% of their pay on a tax-deferred basis in the 401(k) feature of the plan. McDonald's matches eligible employees' contributions with $3 for each $1 of the first 1% of pay they contribute, and $1 for each $1 on the next 4% they contribute. Eligible employees may also receive a discretionary profit sharing match of 0% to 4% based on the first 1% of pay they contribute. Employees are always 100% vested in their contributions and the company matches.

Mc$ave Mc$ave is a special money market fund for McDonald's employees. Money put into Mc$ave is invested in the Prime Reserve Fund managed by T. Rowe Price.

MCDirect Shares MCDirect Shares is a direct stock purchase plan that lets employees further build ownership and reinvest dividends in the company.

Credit Union All McDonald's employees can take advantage of a full range of services available through the Corporate America Family Credit Union.

Financial Planning Services This program gives employees access to professional financial planning services through Ameriprise Financial.

Other Benefits: Balancing work with life outside of it can be challenging. McDonald's believes that it's important to strike the right balance. That's why McDonald's offer many programs designed to help their employees maintain the right balance.

Vacation, Holidays McDonald's offers paid vacation for corporate, region and division office employees as well as Restaurant Management employees. The amount of vacation time employees have available depends on how long they have worked at McDonald's. In addition, McDonald's offers nine paid holidays (less for part-time workers) for eligible employees.

Anniversary Splash Eligible employees get an extra week of paid time off in the year when they reach an anniversary “on the fives” – their five, fifteen, twenty-five or thirty-five year anniversary.

Sabbatical Program Eligible employees can take an eight-week sabbatical for every 10 years of full-time continuous service with the company.

Short Fridays From mid-May through mid-September, McDonald's corporate, division and region offices' work hours begin a half hour early in order to end early (1:00) on Fridays.

Leave of Absence Employees may be faced with difficult situations that require them to take time from work, McDonald's provides a leave of absence program with specific policies regarding types of leave such as family and medical leave, adoption leave and funeral leave.

Alternative Work Approach To help corporate, division and regional office employees better balance their work and personal life, they may be able to arrange an Alternative Work Approach. There are two full-time options (flex time and compressed work week) and two parttime options (part-time schedule and job sharing).

Adoption Assistance McDonald's adoption assistance program helps employees afford the costs associated with adopting a child under age 18. Employees are reimbursed for 80% of eligible expenses, up to $2,500 per child.

Child Care McDonald's has agreements with three national child care providers Childtime Learning Center, Knowledge Learning Corporation and La Petite Academy - for a 10% discount on tuition for employees. (They do not offer discounted rates for children under age 2.)

Educational Assistance McDonald's educational assistance program helps support eligible employees in their efforts to further their education. Employees can get reimbursed for 90% of eligible expenses for grades "C" and above.

Matching Gift Program Matching gifts program is designed to encourage employee support of not-forprofit organizations. With this program, McDonald's matches employee gifts to

qualified educational, civic, cultural, health and youth organizations with one dollar for every dollar contribute by the employee.

Employee Resource Connection This program gives eligible employees access to a broad array of services that help them manage many facets of their life outside the office, including: Concierge services, financial services, legal services and counseling services.

International Fitness Club Network Employees can receive discounts on new membership or other rewards for existing membership at participating clubs nationwide, plus discounts on home fitness equipment, and online health and fitness information.

Auto and Home Insurance Program McDonald's employees can purchase auto and home insurance through the MetLife Auto and Home Insurance Program. The MetLife Auto and Home Insurance Program offers a McDonald's group rate plus other advantages.

BeyondWork BeyondWork ,hoping to attract more young adults and professionals, the chain is also adding amenities like Internet access and rental iPods.

Facilities Crew room This room is provided for the employee for recreation and rest during the break time. The employee can study, listen to music, and get trained in this room

Breaks It is not easy to maintain quality, service, and cleanliness. It take hard work and hustle. To keep energy level high, all the crew member working above five consecutive hour are eligible for an unpaid break of an hour.

Employee Meal One of the best things about working for McDonald’s is for food. Employees can enjoy quality nutritious food at world standard hygiene levels. It is free to managers and crew. All the meals consumed must be recorded and consumed in the restaurants itself.

Locker Facility Lockers are available for the employees use at the restaurants for keeping the personal belongings in a safe and secure place during the shift.

Other Facilities In addition to the above facilities the employee also enjoys with the team member during the yearly store outing and various inter-store activities arranged system-wise and patchwise. These activities are fun and provide opportunity to have a good time and know fellow employees better.

Retirement Benefits Employee provident fund All the employee are eligible for the provident fund scheme as per the company’s rule. Provident fund is a retire benefit provided to every employee of McDonald’s. Every employee contribute12% of his basic salary to his/her PF account. There is an equal contribution by McDonald’s employer. However 8.33% of the employer’s contribution is deposited to the Employee’s Pension Fund and the rest goes to the Provident Fund.

Employee State Insurance All the crew member are eligible for the Employee State Insurance as per the ESI rule. This benefit is provided to the employee for free medical treatment in case of sickness, maternity, and employment injury. The employee contribute 1.75% of his gross salary where as the employer contributes 4.75% .

Bonus: Depending upon the law applicable at the relevant time the employee will receive an amount of 8.33%of the basic salary earned during the financial year.

Gratuity All the full time employee who have completed 5 years of continuous employment with the company are eligible for gratuity. The employee will receive an amount of 15 days basic salary for every week worked. The amount is given at the time of separation or retirement from the company.

Workshops: McDonald’s Intercultural Learning Practice is uniquely designed to promote diversity and create a more inclusive environment. Some workshops McDonald’s offers its employees are as follows: •

Intercultural Learning Lab

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Asian Career Development

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Black Career Development

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Hispanic Career Development

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Lesbian Gay Career Development

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Women’s Career Development

CONCLUSION: McDonald's believes that the success of the restaurants and the company is achieved through the people it employs. Their policies are based on the philosophy of our founder Ray Kroc who believed that, “If you take care of your people, the business takes care of itself”. Thus the company aims to recruit the best people and to retain them by offering various benefits and facilities.

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