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Contents
Introduction ................................................................................................................................ 3
Analysis of the International Human Resource Strategies of McDonald’s ........................... 3
Appropriate level of fit between overall international human resource strategies in global
context with that of McDonald’s ............................................................................................ 6
Conclusion ................................................................................................................................. 9
REFERENCE ........................................................................................................................... 10
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Introduction
Human resource management (HRM) is an universal concept in terms of processes, policies
and strategies. The term HRM progressively replaced personnel management. Developing
and managing human resources is a challenging task for the organizations, specifically for the
international organizations (Janatifar, et al., 2014). HRM have theoretical as well as practical
importance for managing labour force. Active and high skilled workforce is essential for the
organizations to achieve competitive advantages. This paper critically examines the human
resource practices of McDonald’s and also discuss the suitable level of fit between the
overall international human resourcing strategy of McDonald’s and a broad international
context in which it functions.
Analysis of the International Human Resource Strategies of McDonald’s
Due to the high presence of globalisation, cultural differences and competition in
international business, importance of international human resource management (IHRM) also
enhances. As per Harzing and Pinnington (2014), IHRM is a key determinant of failure or
success in global business. IHRM consist of broad range of HRM activities than domestic
HRM and it is effective for solving the HR issues related to staffs belonging to more than one
nationality. Main IHRM practices include repatriation, global staffing, performance
management in global assignments, pre-departure training for global assignments,
compensation issues in international assignments, etc (Briscoe, Schuler and Tarique, 2012).
According to Janatifar, et al. (2014), recruitment and selection, assessment of employee
performance, planning, training, etc are the main characteristics of IHRM. IHRM aid the line
managers by providing adequate suggestions and guidelines about employee performance
evaluation, training, recruitment, etc. varied strategies are used by the firms for recruiting,
training and evaluating employee performance and it makes the company unique from others.
McDonald’s is a leading and largest international fast food retailer with over 30000
restaurants in more than 121 countries. Unique global infrastructure, advanced operational
systems, high quality food, experienced management, outstanding brand recognition, efficient
human resources, etc helps McDonald’s to capitalize on international opportunities
(Weinstein, 2012). To become the best employer in the world is one of the main global
strategies of McDonald’s and the company believed that satisfaction of internal customers is
essential for satisfying its external customers. Thus the company gives high priority for HRM
practices to satisfy its employees.
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In the opinion of Weinstein (2012), employees are one of the main factors influencing the
success of McDonald’s. McDonald’s only prefers individuals, who can feel, think and
express themselves and ready to learn and teach and hence grow. The growth of employees
indicates the company’s growth. McDonald’s hire people with or without experience and
provide effective training to improve their performance and skills. Thorough in-house
training offered by McDonald’s aid the inexperience people to adjust with the distinct
organizational culture. The company recruit people without any nationality, colour, gender,
race and regional discriminations. Only merits of the people are considered as a criterion for
selection (McDonald’s, 2013). Both internal and external recruitment are conduct by
McDonald’s for staffs’ selection. Job posting is the source of internal recruitment whereas
sources of external recruitment includes walk-ins, internship programs, ads on print media,
web sites, etc. Applicant screening, W-I-S (written test), initial interview, reference checks
and final interview are the selection procedures (Silberman, 2013).
As Silberman (2013), McDonald’s offers training and career paths for crew members to
managers to id them to progress. Most of the training programs of McDonald’s focus on
improving the functional operations skills needed for the on-the-job performance in the
restaurant. Moreover, company also provide training for improving the fundamental
workplace skills like work ethics, customer services, communications, teamwork, time
management, etc. Staffs often start at the crew member level and after the completion of
training and learning certain skills, they get opportunity to obtain higher job position up to
restaurant management positions (McDonald’s, 2013).
McDonald’s (2016a) noted that, through McDonald’s Hamburg University, the company
provides training for its staffs, managers and franchisees. This university offers training in
cleanliness, service, food safety, quality, restaurant procedures and other business and
restaurant management topics. The McDonald’s employees at Hamburg University receive
training in 22 languages to provide effective services to customers in different parts of the
globe. McDonald’s also conducted leadership development programs for motivating the
staffs to develop as a leader. For the world-class leadership development, McDonald’s
leaders get training from the Jim Skinner Institute of Leadership (McDonald’s, 2016b).
McDonald’s (2016c) identified that, for improving the performance level of the employees,
McDonald’s also offers recognitions; rewards and compensation programs and which include
long-term incentives, recognition programs, company car program, incentive pay and base
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pay. McDonald’s (2016d) mentions that, McDonald’s also provide health and insurance
benefits like medical, dental, vision supplement plan, employee and dependent life insurance,
business travel accident insurance, etc. The company provide higher importance to maintain
work-life balance of the staffs and for this, McDonald’s offer 24 days paid holiday per
annum, personal and sick time, child care discount, flexible working hours, educational
assistance, and shopping discount program, etc (Choi, 2015).
Employee motivation is essential for the organizations to improve the performance level of
the staffs and thereby to improve the overall performance of the organization. Thus,
employee motivation is one of the key objectives of IHRM practices of every firm (Harzing
and Pinnington, 2014). Equity theory, Cognitive Evaluation Theory, Two Factor theory,
Maslow’s Hierarchy of Needs theory, etc are effective for analysing the strategies to be used
by the organization to motivate the employees. As per Briscoe, Schuler and Tarique (2012),
Two Factor Theory by Hertzberg is an effective theoretical model to analyse the elements
that motivate the labour force. As per the Two Factor Theory, attainment of hygiene factors
restricts employees’ job dissatisfaction level whereas attainment of motivational factors
increases satisfaction level of the employees.
Figure 1: Hertzberg’s Two Factor Theory
Source: Harzing and Pinnington (2014)
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In accordance with Two Factor Theory, McDonald’s adopt various motivational factors to
motivate and encourage its staffs. McDonald’s offers effective training and development
programs, leadership development programs, rewards and recognition programs, health and
insurance benefits, etc to its staffs for improving their satisfaction level (McDonald’s, 2013).
In this way, McDonald’s tries to ensure consistency in IHRM strategies through its
motivational strategies. However, Lobosco (2015) observed that, even though McDonald’s
take high effort to motivate and encourage its labour force, lack of accidental protection
measures in the workplace, poor wage, improper working condition, long working hours,
high work pressure, etc in McDonald’s create employee job dissatisfaction. Improvement in
working environment, reduction in work pressure and increment in salary/ wages, etc are
essential in McDonald’s to improve the satisfaction level and performance level of the
employees. This will aid the company to improve its overall performance.
Appropriate level of fit between overall international human resource strategies in
global context with that of McDonald’s
As observed by Ghanawi (2012) corporate bodies consider human resource practices as
pivotal for obtaining, utilizing and motivating employees for the accomplishment of
organizational goals and objectives. Boella and Goss-Turner (2013) mentions that , effective
human resource team are necessary for firms to develop and maintain perfect team of
workforce to face new challenges arising out from technologies, competition and knowledge.
McDonald’s is one of the leading fast food restaurants in UK. The firm has well established
HR policies that acquired success in global context. In the view of Rowley and Warner
(2013) the major competitors of McDonalds’s in fast food chain include KFC, Pizza Hut and
Burger King.
Truss, et al. (2013) observes that the main objective of HR practices in McDonald’s is to
build, support and utilize employees for achieving competitive advantage in fast food
industry by way of delivering quality products and services to customers. It has been
identified that the HR departments of McDonald’s is divided in to HR operations, training
and compensations and benefits units where HR operations of McDonald’s deals with
recruitment and selection process (Rowley and Warner, 2013). Likewise, the HR practices of
KFC; the main competitor of McDonald’s includes training and developmental programs,
compensation and benefits, employee empowerment programs etc (Arthur, 2012). As
observed by Boella and Goss-Turner (2013) McDonald’s has used various methods such as
advertising, career fairs and local job centers for hiring candidates right for the job roles, but
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on the other hand KFC adopted extremely different method for hiring candidates and it
comprises of both internal recruitment and external recruitment process (Caligiuri, Lepak and
Bonache, 2010). First preferences are given by KFC to employee referrals and word of mouth
and this creates fair relation between employees and management (Choi, 2015). McDonalds
during the time of interview utilizes interview guide for obtaining brief understanding about
how past behavior of applicants can influence future performance (McDonald’s, 2016a).
Additionally, the company holds an approach that actively seeks for actual situations or
events rather than considering theoretical responses from candidates (McDonald’s, 2013).
This will benefits company to have talented employees adopting practical approach in their
job roles (Caligiuri, Lepak and Bonache, 2010). Moreover, the company after the selection of
employees provides welcome meeting for addressing company overview, rules and
regulation, company HR practices policies and procedures, safety training etc.
As per the observation of Sparrow (2010) KFC in its recruitment and selection process has
involved three tests which are prepared by experts in accordance with international level of
HR practices. IQ tests for staffs employed at support centre, Team Member Readiness
Inventory tests for assessing employee skills and Hiring champion’s inventory tests for
Assistant Restaurant Managers are the major three tests conducted by KFC during
recruitment and selection process (Caligiuri, Lepak and Bonache, 2010).
McDonald’s during its international expansion have brought similar changes to HR practices
and this is vital, since the behavior, attitude, and educational level and other demographical
segments of candidate’s changes with respect to country to country (McDonald’s, 2016b).
While analyzing the HR practices of KFC, it has been identified that the company has
followed same approach in its HR practices with no alternation while going global (Arthur,
2012).
The principle objective of KFC is to expand business globally and to provide quality, better
and fast products and services to customers (Sidhpuria, 2009). As opined by Caligiuri, Lepak
and Bonache (2010) for transforming this objective in practical, KFC has followed unique
approach in its HR practices which is successful at global level. Subsequently to consider
talented candidates from various geographical sections, the firm has consistently altered its
HR polices and also had taken increased attention to abide with laws in respective country.
As per the observation of Boella and Goss-Turner (2013) KFC have been contributing more
towards its training and developmental programs for improving the performances of
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employees in order to accomplish organizational goals and objectives. For measuring the
performance level of employees, KFC utilized the strategies such as 360 Degree feedback,
preparation of performance checklist, Balanced Score Card and other performance appraisal
methods, indicates Arthur (2012).
Additionally, KFC provided fair rewards, incentive packages and benefits to employees
based on their individual as well as group performances (Bratton, 2015). This has helped the
firm to obtain loyal as well as highly committed employees for enhancing the brand image
and reputation. KFC to its employees provided extensive training programs by utilizing
formal classroom, e-learning and on-the-job training practices (Arthur, 2012).
On the other hand, in tie up with Hamburger University, McDonald’s provided training
programs to employees for developing their skills along with career development programs
(McDonald’s, 2016a). Alternatively, the principle objective of McDonalds is to provide good
returns to shareholders through serving quality products and services to customers in
alignment with business ethics, mentions Harris and Short (2013). Therefore the HR
strategies adopted by McDonald’s well suits in the context of KFC.
As opined by Thomas and Lazarova (2013) customer satisfaction towards a company is
dependents up on the way employees provides products and services to them and this will
consequently aids organization to provide fair returns to shareholders. This hence highlights
that, enhancing the job satisfaction of employees is pivotal for firms to obtain higher
customer satisfaction. McDonald’s has adopted well defined HR practices to enhance
employee satisfaction, such as excellent training and developmental programs, reward
programs, incentives, motivation developmental programs etc (McDonald’s, 2016a). This
strategy will best fit with KFC, since the principle aim of firm is to expand globally by
enhancing employee satisfaction.
But at certain extent, McDonalds and KFC has followed distinct approach to manage
employees (Harris and Short, 2013). Though the major objective of KFC is to expand
globally, the firm has well maintained its HR strategies and focused more on targeting highly
talented employees to adapt with varied culture while going global. However, the major
objective of McDonalds is to provide fair returns to shareholders, therefore the firm has
maintained increased attention towards employee developmental programs for reaping long
lasting business benefits.
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Conclusion
Organizations consider effective HR practices as pivotal to obtain, create and utilize highly
talented employees for the accomplishment of organizational goals and objectives. In the
current report the researcher analyzed HR practices of McDonald’s and identified that the
firm has maintained consistency in its components of HR practices including selection and
recruitment, payment and rewards, training and development etc. Additionally, the report also
analyzed the fitness of HR practices of McDonald’s with global context where it operates as
well as with its major competitor KFC.
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