Organization Behavior Strategic Management of Human Resources Essay

Excerpt from Essay :

Organization Behavior

Strategic Management of Human Resources

This paper acquaints the reader with the Human Resource Management at the largest fast food brand in the World -- McDonald's. It describes the core HRM practices which are currently in use at the company and discusses them in the light of modern International HR Management practices. The paper also contains recommendations on how McDonald's can improve its HR practices.


McDonald's is the World's largest fast food service retailer. Head quartered in Oak Brook, United States; it operates with almost 33,000 fully functioning fast food outlets in 119 countries. It was incorporated as a barbecue restaurant by Richard and Maurice McDonald in 1940. Initially, McDonald's was just offering beef burgers, drinks, and fries. In 1955, McDonald brothers sold it to Raymond Albert Kroc who was a franchising agent at that time. Ray Kroc took this business to the heights of success by expanding its outlets to various locations in the United States in a very short span of time. At present, McDonald's is the largest and the most successful fast food chain with a high level of customer satisfaction and brand loyalty. Its major product offerings include Big Mac (hamburger), Chicken McNuggets, French fries, Quarter Pounder, soft drinks, milkshakes, breakfast, desserts, coffee, etc. (McDonald's 2012).

McDonald's has always adopted a growth strategy for its business operations all over the world. It expands through various international growth strategies including permanent establishment or full ownership, franchising, and licensing. Its international incarnations account for almost half of its sales revenues by adopting the same highest standards of product and process designs. With the passage of time, McDonald's has strengthened its brand image and recognition by providing the highest quality of food products, instituting a unique business infrastructure, and maintaining the top most position in the industry (McDonald's 2012).


McDonald's employs more than 400,000 employees around the Globe. The Organization wide HRM policies and strategies are formulated at the Head Office in Oak Brook while implemented at the regional offices, business units, and franchises under the full supervision and control of the Parent company. In the light of these corporate level policies and strategies, McDonald's molds its HRM practices according to the diverse cultural requirements and working environment patterns (McDonald's 2012).

To manage such a large workforce and get the work done through it in an effective and efficient way, McDonald's has adopted the best HRM practices which not only make it one of the most liked employers, but also contribute towards its competitive standing in a large crowd of other food retailers. To be a good employer, McDonald's shows a deep concern for its employees. For this, it provides them handsome salary packages and other non-monetary benefits.

As per the Employee Handbook, McDonald's employees receive market-based salaries as well as some long-term benefits like health insurance, disability leave, retirement benefits and some short-term benefits like paid medical leave, free training, etc. The managers also use some performance appraisal techniques to motivate the employees who perform exceptionally well in their sales targets.

The following sections explain the HRM practices which McDonald's has adopted and implemented at its workplace around the Globe:


McDonald aims to hire the best and the most talented workforce for its business units and offices. It has set up a well-defined recruitment and selection process in order to ensure its business operations are run by a dedicated and committed workforce (McDonald's 2012). For any particular job position, McDonald's uses the following recruitment and selection process:

a. Inviting applications for new job positions:

The first step in this process is to invite open applications for any vacant job positions in the organization or its offices. McDonald's advertises its vacancies on all the major public media including newspapers, circulars, and internet. The applications are submitted online by the candidates.

b. Review and screening of the applications:

The HR Team, under the supervision of the HR Manager reviews the applications of all the candidates and screens out the applicants who best meet the criteria set for a particular job position. Generally, the HR team looks for the educational qualification, knowledge, skills, and experience of the candidates in the required field. The screening is purely done on merit with no favoritism or biasness towards any class, society, or cultural background of the candidates (McDonald's 2012).

c. Follow-Up Screening:

Follow-up screening is like an initial interview. The applicants who are screened out in the previous step are called up for a written test or formal interview. The purpose of this test or interview is to judge the inner abilities and knowledge of the applicants in order to conclude how fit they are for the job opportunity.

d. On-site Interview:

After the initial interview, the top applicants are required to appear before a panel of recruitment managers and team leaders. Each of the members in the panel analyzes the applicants with his set criteria. This is the most crucial phase for all applicants as it entails their real judgment by the Leadership of the organization.

e. Pre-Employment Screening:

Applicants are also screened on the basis of their track record, employment history, social security, verification of their educational records, involvement in crimes, etc. This step screens out the applicants who have made any type of misrepresentation with the hiring team.

Equal Employment Opportunity:

Females are an equally important part of an economy. Just like they deserve equal rights and respect in their society, they must be given equal concern in the organizations. Those organizations are considered socially responsible corporate citizens that give equal employment opportunities and benefits to the female workers. McDonald's gives females equal chances of selection in the recruitment process, equal monetary and non-monetary benefits, and more flexible work options than male employees. This is because they have more duties and responsibilities at home than male employees. McDonald's provides flexible work options to female employees that enable them to manage their professional career without disturbing their children, husbands, and other family members (McDonald's 2012).


McDonald's recognizes the significance of good compensation packages to keep the employees motivated and committed towards the organizational goals and objectives. It believes that a good salary and non-financial benefits improve the performance level of employees as they feel fully satisfied with their employer (Bloom & Milkovich 1997). Generally, the compensation packages at McDonald's include the following elements:

a. Basic Salary:

The prime and the most essential element of the compensation package is basic salary. This is the fixed component of the compensation package which McDonald's pays to every type of employee. McDonald's pays an attractive basic salary to all the parent country nationals, host country nationals, and third country nationals at different regional offices and business units. The basic salary is paid according to the job type, the skills and competencies required for the job, and an employee's proficiency in performing the job responsibilities.

b. Short-Term Incentives:

Short-term incentives are purely based on performance of employees. Only those employees receive these incentives that perform exceptionally well at the workplace or achieve their targets in an effective and efficient way. Short-term incentives are generally paid in the form of cash compensation; however McDonald's may also give promotion to the employees to the higher job positions (McDonald's 2012).

c. Long-Term Incentives:

As a part of its long-term incentives, McDonald's offers LTI stock to its employees so that a long-term relationship is established with the team of highly committed individuals at the workplace. These employees are considered an asset to the organization as they promote the business at international grounds and contribute towards an increased organizational productivity and market growth.

d. Company Car Program:

McDonald's also offers company cars to its employees. They can use these cars for business as well as personal use. The car program is available to the middle to top management employees of the organization. However, high performers in the lower management level can also avail this package if they meet the desired level of expectations.

Other elements of the compensation packages include; medical reimbursement, dental treatments, profit sharing, paid holidays and vacations, Sabbatical programs, life insurance of employees and their family members, etc. (McDonald's 2012).


Hiring new employees is better or retaining existing employees?

It is believed that retaining existing employees is more beneficial for any organization. It not only saves the cost of recruitment process but also keeps the loyal employees always associated with the organization. McDonald's also recognizes its importance. That is why it spends a lot on the training and development of its existing employees. It provides full job security to all its employees at different organizational levels. This thing increases their job satisfaction, loyalty with the organization, and commitment to work for a long period of time.

Apart from this informally implicit job security, there is no special program, declaration, or incentive that could prove that McDonald's has setup an employment security system for its employees.…

Sources Used in Document:


Anca, D.C., & Vazquez, A., 2007, Managing Diversity in the Global Organisation. New York: Palgrave: Macmillan

Ashamalla, M., H., 1998, International Human Resource Management Practices: the Challenge of Expatriation. CR, 8 (2): 54-63

Bloom, M., C., & Milkovich, G., T., 1997, Re-thinking international compensation: From expatriate and national cultures to strategic flexibility. NY: Cornell University, School of Industrial and Labor Relations, Center for Advanced Human Resource Studies, pp. 1-2

Chain, P., H., 2000, What Real MNEs are doing in Managing Expatriate Assignments: Trends and Strategies, International Management, IS 6670, pp. 2-4

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