Human resource management strategies at McDonald's

Human Resource Management |

McDonalds

McDonald's

McDonald's has been around since 1937, and has created a household name for itself being the number one ranked Fast Food Chain across the globe ("Human resource management at McDonald's," 2009). In 1993, their annual sales reached a jaw-dropping $23 billion dollars. In the United States, the organization has well over half a million workers, making it one of the biggest employers in the nation. McDonald's has around 10, 000 locations, covering 137 countries and operating over 30, 000 restaurants worldwide.

One of the main strategies of McDonalds is to increase revenue by selectively designating locations where it is believed a franchise would benefit ("McDonald's Corporation," 2010). This is done by the company placing restaurants not only in neighborhoods, but also in malls and airports to expand its target market and gain revenue. McDonalds targets markets mainly families with children, suburban communities as well as teenagers. These reasons are- for families with children, automatically, Mcdonald's will sell at least three meals per family dining, suburban communities, for greater brand recognition and comfort with the brand within a community and for teenagers, it gives them a place to "hang out." The strong brand recognition of those golden arches gives McDonalds an advantage because of repeat customers.

McDonald's has been pursuing growth for the past few decades; they boast about their billions of burgers sold each year. However, throughout the past years, McDonald's has been facing a decline in sales with current law suits, negative media coverage and health issues relating to their contribution to the growing number of children suffering from obesity ("Human resource management at McDonalds," 2009). McDonald's became in desperate need to attract more customers in-order to stabilize their sales, or better yet increase them. They had attempts to change their menus and offer different products aside from their regulars. Some new products proved as failures and were rejected by the public, causing McDonalds' sales to decline more. McDonald's strong strategic orientation when it comes to marketing is assumed to be one of the main reasons why it is leading in the fast food industry.

Competitive Advantage

Recruitment and Selection

Employees of McDonald's fall under three groups -- franchise owners, restaurant staff and corporate staff. Corporate staff members work in corporate headquarters which can be located at the regional offices of McDonald's. Human resource management is defined as the strategic and coherent approach for a company towards their employees, who are considered their most valuable assets. In other words, human resource management takes care of the human capital in an organization ("HRM function," 2008). It focuses on recruitment, management and pointing out directions for people who work in that certain organization (Heathfield, 2010). It includes a variety of activities such as deciding what the staff may need, compensation, hiring, etc. (McNamara, n.d.).

Crew members or the restaurant staff is the majority of McDonald's employees. These positions are mostly entry-level, and part-time. Amongst the restaurant staff are the managers and the assistant managers, they watch over the performance of the crew members and ensure that the quality of the products and services provided are kept consistent. Human resource management is often seen as a reflection of the distribution of power within a system (Schuler, & Jackson, 2007). The goal of human resource management is to achieve the goals of the organization. For McDonald's the goals of their organization highly depend on the job structure.

Since most McDonald's staff is comprised mostly of the youth, the organization is committed to prioritizing education. McDonald's ensures that all school-aged employees see their education and school work as their top-priority.

Human Resource Management of McDonald's

Different types of organizations come up with different strategies and approaches to be able to control their workforce. This all depends on what their market is, and how they compete. It is argued that there are three main bases to gain competitive advantage. These are:

1) Innovation

2) Quality

3) Cost

Strategies which revolve around the quality and innovation of products and/or services sold are dependent on a committed workforce ("Human resource management at McDonalds," 2009).

The Human Resource Management at McDonalds (2009) states that: "Control at McDonald's is not merely achieved by direct supervision, machines, the physical layout of the restaurant and the detailed prescription of rules and procedures but also through recruitment." And this recruitment is the responsibility of the human resource management department who is in charge of attracting human capital.

The hiring of unskilled or inefficiently trained workers can take a toll on a company's level of quality and innovation. Since McDonald's is known for their consistency in service and products, they would require workers who are able to deliver up to standards. There is a need for workers to be aware of the elaborate system and rules which govern the organization. These rules include the grounds for promotion and for punishment.

Since McDonald's is such a big organization, falling second to Walmart in the United States, they would require efficient and skillful leaders with ample knowledge in human resource management (Asuka, 2010). To be able to reach these sales, a strong organizational management needed to be built. This can be done by setting up common goals between employees and the organization ("Human resource management at McDonalds," 2009).

McDonald's is a place which emphasizes training and development of its employees in order to achieve an efficient and productive workplace. The organization provides career opportunities for people to maximize their potential which is flexible in terms of their family and education ("McDonald's company facts," n.d.).

Training in McDonald's

Since McDonald's opened its doors, the training process in which all employees must undergo has been emphasizing on consistent restaurant procedures ("Hamburger university," 2010). Like all companies, McDonald's likes to reduce their chances of error, to ensure this, all employees must be well trained and familiar of their work (Williams, 2006).

The organization of the training process at McDonald's is highly structured. Entry-level employees are taken through basic crew training. The program includes on-the-job training which ensures that the employees get hands-on experience before being out on the field and working independently. As the level of employment advances, so does the training requirements and programs advance as well. This all depends in which field an employee enters in, and McDonald's provides ample training to make sure all its employees understand the system and can work efficiently within it.

Training begins immediately after employees are oriented on the company. Each restaurant is equipped with its own video-training room, and all hand-out step-by-step manuals which cover all aspects of operations -- from how to make a cheeseburger, to how to handle customers.

The training of McDonald's employees ensures that once they have completed the process, they are expected to do the following:

Report to work on time, in proper attire

Maintain a level of hygiene

To know and understand operational procedures

Rely on team-work and high energy performance

Remember to be fully customer-oriented and, to deliver fast and efficient service

Organizational Climate

McDonald's is not only the number one ranked fast food chain in the world, but it is also one of the biggest employees in the United States. They are dependent on their employees to give customers what they are looking for -- consistent service and quality products. When customers receive this and are duly satisfied with their experience at the restaurant, the organization's revenue will increase. The main goal of McDonald's is for an increase of revenue as well as growth and expansion.

Today, McDonald's management is known to be one of the most efficient and organized for a large company. This is why their doors have been open for decades, and if management only improves, they will stay in business for years to come.

Human resource management plays a big role in keeping McDonald's quality of service, which ensures that customers keep coming back for the consistency in products as well as service. The HR ensures that all employees are well equipped with the right training to be able to meet all the customer's needs. Not only do they provide training, but they keep their employees on goal and with their priorities in the right place.

Since human capital is the most important asset in an organization, it is the human resource department's job to be able to find the right employees, keep them happy and manage them well for an efficient and productive working environment. McDonald's ensures that hiring of employees is done following specific standards, and all employees must undergo training. Beyond that, management requires that branches are maintained by regularly doing quality assessments conducted by regional managers.

All these are ensured and kept in line by human resource management, and it is the goal of human resource management for the organization to effectively meet its goals whilst keeping a good, well maintained working environment and happy, productive employees.

Conclusion

The food industry is one of the biggest markets on the globe, and they owe this to their organizational structure. Every nation is part of this, no matter where you are on the globe. Consumers have very high demands when it comes to the quality of taste and consistency in their food, also they are always looking for a way to save money, yet still getting their quality. To be able to satisfy all these demands, organizations which are part of the food industry have to continually come up with new ways to be able to impress their consumers, putting a lot on the line.

Keeping customers is the main objective when it comes to any industry because that is where their revenue comes from. Therefore, organizations must establish and maintain a good relationship with their customers. McDonald's has a management which purely revolves around their customers. This is the reason why they are so successful.

McDonald's has key efforts in putting their customers first, having good quality and consistent products at affordable prices, providing a hygienic and ambient environment as well as promoting their brand well.

To be able to do this, McDonald's has devised a well organized way of handling management, starting from setting their goals of gaining revenue, hiring people who can help accomplish these goals, maintaining and managing these people in an efficient workforce and addressing problems which are duly handled. All of these are part of a power cycle which starts at human resource management ("McDonald's management," 2006). McDonald's human resource management proves their success in the success of their organization -- over 60 billion burgers sold worldwide.

The McDonald's overall management success in reaching its goals is based from the organization's well structured human resource management who takes care of its human capital from the hiring process to efficiently managing them in synchronization to the organization.