Mcdonald's Strategic Human Resource Management

ST. HRM PRESENTED TO: PROF: SOHAIL SALEEM PRESENTED BY:

ADEEBA ASLAM SUNNA AHMED

HIRRA PERVAIZ

MCDONALD’S CORPORATE PROFILE McDonald's is the world's leading fast-food company by sales, with about 32,000 restaurants serving burgers and fries in about 120 countries. (There are nearly 14,000 Golden Arches locations in the US.) The popular chain is well-known for its Big Macs, Quarter Pounders, and Chicken McNuggets. Most of its outlets are free-standing units, but McDonald's also has many units located in airports and retail areas.

PRODUCTS McDonald's is proud to offer a wide variety of high-quality, great tasting menu options. The restaurants offer substantially uniform menu consisting of hamburgers and cheeseburgers. The menu includes the following

Big Mac Quarter Pounder with Cheese Filet-O-Fish Several chicken sandwiches French fries Chicken Mc Nuggets Salads Low-fat shakes, Mc Flurries Sundaes. Cones Pies Cookies Soft drinks as well as other beverages

COMPETITION McDonald’s restaurants compete with international, national, regional and local retailers of food products. McDonald’s competes on the basis of: • Price • Convenience • Service, by offering quality food products.

Its competitors include:

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Burger King Wendy’s Hardees Taco bell and KFC

ORGANIZATIONAL ANALYSIS      

EXTERNAL ENVIRONMENT POLITICAL ECONOMICS SOCIAL/CULTURAL TECHNOLOGY LEGAL ENVIRONMENT

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SWOT FRAMEWORK ANALYSIS STRENGTHS Leader in the Quick Service Sandwich Industry, Brand Recognition Strongest International Presence and Highest Worldwide Sales Real-Estate Holdings Easily Recognizable Product Variety of Sources of Income Franchise Business Model

WEAKNESSES • Continuous Struggles in Offering Value-Priced Items and Expensive Items

• High Employee Turnover Rate

OPPORTUNITIES • • • •

Growth in Global Food-Service Industry Initial Public Offerings in Other Countries Acquisition of Other Restaurants Retail Sales of Merchandises

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THREATS Increased Competition from Various Industries Health Conscious Consumer Trend Value-Conscious Consumer Trend Saturation of US fast-food market Slow Growth in the Sandwich Segment Price War Business Practices

CORPORATE STRATEGY It includes the following,

• Philosophy • Vision

CORPORATE STRATEGY

GROWTH STRATEGY

DIVERSIFICATION STRATEGY

CORPORATE SOCIAL RESPONSIBITY

Vision: McDonald’s vision is “ TO BE THE WORLD’S BEST QUICK SERVICE RESTAURANT EXPERIENCE.”

To achieve this vision, McDonald’s is focused on three worldwide strategies: • To be the best employer for its people in each community around the world, • To deliver operational excellence to its customers in each of its restaurants, & • To achieve enduring profitable growth by expanding the brand and leveraging the strengths of McDonalds system through innovation and technology.

Philosophy of McDonald’s: Company’s philosophy is

“ Q.S.C. & V.”

GROWTH STRATEGY

ADDING RESTURANTS

MAXIMIZING SALES & PROFIT

IMPROVING INTERNATIONAL PROFITABILITY

• Adding restaurants can be achieved with people and capital resources. • Maximizing sales & profit can be accomplished through better operations, reinvestment, product development, effective marketing and lower development costs. • Improvement of international profitability can be achieved as economies of scales are achieved in individual markets.

CUSTOMER SATISFACTION: • • • • •

Healthier Foods Food Quality and Nutrition Larger Menus Restaurant Diversity Kids

UNTAPPED MARKETS:

• Diversification: Recently McDonald’s began a series of acquisitions. Now the company operates several restaurants concepts, such as Aroma café, it’s a small chain of coffeehouses serving prepared sandwiches and pastries, Chipotle Mexican Grill, it’s a fresh max grill serving gourmet burritos and tacos and Donatos Pizza, and it’s a restaurant business that sells pizza, subs and salads. The company also welcomed Boston Market, a U.S. chain specializing in fresh, convenient meals, featuring fresh vegetables, sandwiches, salads, and side dishes to the “MCFamily”.

• International: currently operates in 119 countries, added about 650 stores in Asia/Pacific, 550 in Europe, and 350 in Latin America in the year 2000 and plans to add more during 2001.

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SOCIAL RESPONSIBILITY: Healthy Growing Up: It’s a program designed to encourage students from kinder garten through third grade to adopt lifelong habits of good nutrition, exercise, and positive selfesteem, Book Some Time Together: McDonald’s partnered with the American Library Association to encourage families to read together through their local libraries. Cartoon All Stars to the Rescue: McDonald’s sponsored this animated, antisubstance abuse television special, which was broad cast on every major network in North America.

HUMAN RESOURCE STRATEGY

Managing Diversity/ Labor Shortages McDonald’s has created program • McJobs for disabled people age of 16-60, • McMasters is a nationwide program that identifies, recruits, trains and retains workers who are 55 years of age and older.

• Equal Employment opportunity McDonald’s has made it a point to attract and retain a diversified workforce. It has been listed as one of the Top Companies for Minorities at Work.

Cultural Differences

Offers managers solid diversity training, including workshop designed to help managers so that they have full advantage of what everybody brings & also want to ensure that people at all levels of McDonald’s bring their energy and creativity into the work environment

HUMAN RESOURCE FUNCTIONS JOB ANALYSIS • In McDonald’s job analysis done on the basis of interviews. • In MacDonald’s they have predetermined standards on which employees are awarded on the basis of their skills, knowledge and experience.

Recruitment, Selection and Retention : For McDonald's, people are its most important asset. This is because customer satisfaction begins with the attitudes and abilities of employees and effective workers are the best route to success.

• Recruiting Suitable applicants Positions are generally advertised in the restaurant. The company's recruitment history shows this is the best method of hiring quality staff, McDonald's also uses local job centers, career fairs and other local facilities. It is vital to use effective hiring material with a clear message targeted at the right audience.

• SELECTION

After the final interview the manager will rate the applicant's responses. A successful applicant will have demonstrated skills and behaviors that have been identified as being key to the position.

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McDonald's inducts all new employees into the business through a Welcome Meeting, which they must attend. The Welcome Meeting gives an overview of the Company, including: Job role Food, hygiene and safety training Policies and procedures Administration Benefits Training and development.

• RETENTION McDonald's believes that the success of the restaurants and the company is achieved through the people it employs.

TRAINING AND DEVELOPMENT: • The first stage of training is at the Welcome Meetings. These set out the company's standards and expectations. • The majority of training is floor based, or "onthe-job" training • classroom-based training sessions

• McDonald’s also has its own “HAMBURGER UNIVERSITY”. • McDonald’s also offers its mangers the solid diversity training program. Training competencies are also extend to McDonald ‘s QUALITY MANGEMNT programs , • McDonald functions as a job training program by teaching youth discipline and the basis of how to work.

• McDonald's Management Development Curriculum takes new recruits from trainee manager to Restaurant Manager. • The Management Development Curriculum is divided into four key programs:  Shift Management  Systems Management  Restaurant Leadership  Business Leadership

• PERFOMANCE APPRAISAL SYSTEM OF MACDONALDs: Performance appraisal method: • Graphical rating scale, and • 360 degree feedback

• Rewards The rewards are given on the basis of the performance There is a raise of 10% in salary and if performance is also counted then 20% increment given at any time of the year.

• BENEFITS: McDonald’s benefit program is designed to attract, energize, reward and retain talented people who will produce superior business results and enhance their leadership position. MacDonald provided health insurance benefit to its full-time employees.

• Benefit communication planning team is designed to include a variety of people from various corporate departments to ensure a diverse representation.

The accomplishment of the benefit communication planning team includes: • Plastic insurance cards with a magnetic strip to automatically bill for prescriptions. • Coworkers communication programs, which allow a group of trained employees to explain the program to other workers

• Profit sharing • Preferred provider organization (PPO) • Educational assistance program • Sabbaticals • Child care

Human Resource Management System • McDonald has implemented K/3 HR Personnel Management, Payroll Management and Report module, as well as Performance Management, Employee Capacity Quality module. • McDonald has built HR management platform and finished planning for organization structure, managed personnel files, input dynamic human resource data and managed payroll.

• Base on K/3 HR System Personnel Management and Payroll Management, McDonald not only records employee transfer, promotion and transfer history but also adjusts the related workflow. • If a resigned staff come back and re-join in, K/3 HR system checks ID Card Number and lists all the history of the staff, which helps the manager make proper decision.

Awards/Achievements • HR Excellence Awards 2009: Best Learning and Development Strategy McDonald's Restaurants • HR Excellence Award 2007: HR Initiative “ The People Project” • HR Excellence Award 2006: HR Director of the Year – David Fairhust

Major Findings • At McDonalds, the corporate culture and management system are strictly imposed, detailed operating manuals followed to the letter and an extensive field organization checks on each store to enforce standards. • The organizational development focused upon generating revenues from the existing operations.

• The biggest change is the expansion in the menus based upon the product development strategy, and market expansion strategy, • They give different trainings to their employees/managers to work in more productive way, and to achieve the goals of the organization.

• the domestic growth has slowed as a result of market saturation but McDonald’s global food service business delivered good results, and was possible only due to expansion and positive comparable sales. • McDonald's develop a deep connection between McDonald’s and the local communities in which it operates.

• McDonald's believes that the success of the restaurants and the company is achieved through the people it employs. • The company aims to recruit the best people, to retain them by offering ongoing training relevant to their position and to promote them when they are ready.

McDonald’s Framework for “Plan to Win” Key Elements Relevant Measures

People

Place

Well trained Fast and friendly service Delighting customers

Clean

Relevant Attractive

Product Food tastes great Lots of choices Hot and fresh

Promotion Consistent with the brand Relevant to the customers

Price Best value to the most people Affordable

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RECOMMENDATIONS FOR AFC: Customer Satisfaction, Proper Advertisement campaign employees turnover rate No proper orientation No proper Performance Appraisal System exists, Proper sitting arrangements

• clearly communicate employees benefits plan • food preparation system to ensure serve fresher, better tasting food at the customary speed, • AFC should focus on corporate social responsibility