Management Report :How to maintain McDonald's as the Market Leader in the Fast Food Industry through Effective Human Resources Management

1. Executive Summary

With the intensive competition in the market place, companies like McDonald are trying to sustain their market leadership by initiating strategies that adhere to the needs of the business environment, the company and the employees as well. This report, aims on providing intensive plan for McDonald in line with implementing a new and strategic Human resource management that cater to the needs of their employees which in return provide quality services on their target market.

The aim of the human resource management is to enhance the abilities and skills of employees through rigorous training and development and to prove recruiting and retention approach to have the best employees. In addition, this paper also discussed the reward and compensation programme to be considered by McDonalds as well as the performance appraisal and management review, to know if the objectives of the company for change have been achieved. The paper concluded that in order for McDonald to achieve their objective of becoming the market leader, they must consider effective human resource management approach at the entire level of the company’s organizational structure.

2. Introduction

2.1 McDonald’s Background

McDonald’s is the largest chain of fast food restaurants and largest quick service restaurant organization in the world, more than 30,000 restaurants in more than 100 countries worldwide, serving nearly 47 million customers daily.

History from 1954 to 1964

Raymond Alber Kroc 1902-1984, A Salesman

Ray Kroc mortgaged his home and invested his entire life savings to become the exclusive distributor of a five-spindled milk shake maker called the Multimixer. Hearing about the McDonald’s hamburger stand in California running eight Multimixers at a time, he packed up his car and headed West. It was 1954. He was 52 years old.

Ray Kroc opened the Des Plaines restaurant in 1955. First day’s revenues-USD366.12

Hamburger University

Founded in 1961, Hamburger University is committed to providing opportunities for McDonald's employees to learn and grow throughout their careers, developing its people throughout every level of the organization located in Oak Brook, Illinois. In order to cater to the international employees' scope of language differences, translators and electronic equipment enable professors to teach and communicate in 22 languages. McDonald's also manages seven Hamburger Universities located in the U.S.A., England, Japan, Germany, Australia, Brazil and Hong Kong.

Ronald McDonald, In Any Language He Means "Fun!"

"The smile known around the world," In his first TV appearance in 1963 the happy clown was portrayed by none other than Willard Scott.

McDonald’s Come To Wall Street

In 1965 McDonald’s went public with the company’s first offering on the stock exchange. In 1985 McDonald’s was added to the 30-Company Dow Jone Industrial Average.

A Big Idea Called "Big Mac"

"Introduced system wide in 1968, the Big Mac was the brainchild of Jim Delligatti, one of Ray Kroc’s earliest franchisees, who by the late 1960s operated a dozen store in Pittsburgh.

The First McDonald in Japan

"Makadonaldo" first opened in 1971 in Japan.

A Big Idea Called "Big Mac"

Introduced in 1973, the Egg McMuffin was developed by owner operator Herb Peterson.

The First Ronald McDonald House in Philadelphoia, PA

In 1974 Fred Hill of the Philadelphia Eagles teamed up with McDonalds’s to create Ronald McDonald House. Here the families of critically ill children have a place to call home while they’re away from home as the young patients undergo treatment for their conditions.

Drive-thru

McDonald’s opened its first drive-thru window in Sierra Vista in 1975, Arizona to accommodate a more mobile society.

The Happy Meal

Sine 1979 the Happy Meal has been making kids visits that much more special. Clubs the world over collect Happy Meals toys and boxes.

Today – 21st century

McDonald’s has sold well over 100 billion hamburgers, prepared more than 6.8 million pounds of French fries every day, and more than 50,000 students have graduated from "Hamburger University".

Approximately 85% of McDonald’s restaurant business world-wide are owned and operated by franchisees who are independent and full time operators. The corporations' revenues come from the rent, royalties and fees paid by the franchisees, as well as sales in company-operated restaurants. McDonald's revenues grew 27% over the three years ending in 2007 to $22.8 billion, and 9% growth in operating income to $3.9 billion. McDonald’s was naming Entrepreneur’s number-one franchise for 1997.

McDonald in Hong Kong

• The first McDonald’s Restaurant (Hong Kong) Limited was established in 1975, which offered customers the very first American Big Mac Meal in Hong Kong, was located in Paterson Street, Causeway.

• McDonald’s was the first restaurant group in Hong Kong to adopt a total smoke-free policy.

• Ronald McDonald presents magic and educational shows to children in nearly 1,000 Hong Kong schools and hospitals every year

• McDonald’s Hong Kong has always been committed to serving the community throught involvement in the territory’s many social services as well as local charity work. It does care about the welfare of children. The first Ronald McDonald House in Asia was opened in 1996 to serve and aid families with critically ill children in hospital.

• The world’s 11,000th McDonald’s opened in Heng Fa Chuen in 1989.

• The world's 7th McDonald's Hamburger University, Hamburger University Hong Kong (HUHK), was opened in 2002.

• In addition to the McDonald’s restaurnat, it also opened McCafe in Hong Kong, in a bid to meet the needs of different customers.

• There are over 200 McDonald’s restaurant and more than 10,000 staffs.

Organizational Structure

The organizational structure of an organization largely dictates the effectiveness of the firm in its management systems. It gives an impetus for work coordination efficiency. Herein, the organizational actors and processes are embedded in a larger organizational system with unique structural descriptions. Industries like McDonald have been able to consider specific organizational structure.

Figure 1

Organizational Structure McDonald

The organizational structure of McDonald is very common among fast food chains. First there are board of directors or known as the top management which include the CEO and the owners followed by different departments such as human resource, audit and accounting department, operations department and information technology department. The company has also operations manager which handles the daily tasks of the service crew. In McDonald, there appeared to be a product controller and crew leader who were non-managerial employees and there are managers who are always present. The managers are responsible for controlling every aspect of the whole operations and service process. Since McDonald is a fast food chain, there is a hierarchy of commands. Further there are also regional manger and store manager all the way to the CEO of the company. The distinction of the management staff and the service crews was very apparent and clear by looking at their uniform.

Each of the members of organizational structure of McDonald has their own functions responsibilities to contribute to the performance of the world’s largest fast food chain. Through their organization structure, it can be said that the strategy imposed by McDonald has become more efficient since it enables the management to have the ability to plan, coordinate, and manage the entire market and business activities. Furthermore, formalization of the organizational structure is thought to lead to greater effectiveness because the predefined rules and policies serve to routinised repetitive business operations and transactions. It is said that one of the roles of having effective organizational structure is to institutionalize how people in the company interact with each other, how the how communication flows internally and externally, and how power relationships are being considered defined. It is said that the organizational structure of an industry like McDonald reflects the value-based choices and selections considered by the company; it refers to how the employee tasks are formally divided, grouped, and coordinated.

2.4 Vision, Mission and Value

Vision is to be the world’s quick service restaurant experience in the world in the eyes of customer. Being the best means providing outstanding quality, services, cleanliness, and value, making every customer is smiling in every restaurant.

Mission is to be the best employer in each community around the world; deliver operational excellence to customers in each of restaurant; and achieve enduring profitable growth by expanding the brand and leveraging the strengths of the McDonald’s system through innovation and technology.

Value is "Q.S.C. & V.". Provide good quality, services to customer. Have a cleanliness environment when customer enjoys their meal. The value of food product makes every customer is smiling.

3. Industry Analysis

Over the past decade one of the fastest-growing business sectors in Hong Kong has been the fast-food industry. According to a report by the Hong Kong Department of Census and Statistics, fast-food receipts increased from HK$6.4 billion in 1991 to HK$69.9 billion in 2007. During the same period the number of employees in the fast-food industry increased from 22,247 to 207,678.

The consumer food-service market is typically broken down into several categories according to the type of food and the restaurant operations. The categories are as sandwich, pizza, chicken, family, buffet, dinner house, and hotel. McDonald’s competes with other businesses, from these other categories as substitute product competitors but primarily competes in the fast-food industry, KFC and Burger King are popular among Hong Kong consumers.

The concepts of quality, service, cleanliness, and value brought by Western fast-food chains had a dramatic impact on local restaurant operators. Before the Western fast-food invasion, those concepts applied only to fine-dining operations. McDonald’s changed the image of fast food in Hong Kong by providing an example of a restaurant where customers could enjoy not only fast service and reasonable prices but also a comfortable environment and good-quality food.

With the rapid pace of life in Hong Kong, working couples and single professionals began to eat out for breakfast and dinner, in addition to lunch.

The fast-food operations in Hong Kong can be divided into two categories: international chains and local chains. Each has a different approach to operations and management. The international fast-food chains comprise three major segment – hamburger, chicken, and pizza. The three major local chains – Café de Coral, Fairwood and Maxims – are all Chinese-style fast-food restaurants.

Hong Kong McDonald’s is the dominant hamburger chain. McDonald’s strategy is simplicity, its menu is remarkably unvaried from year to year. Apart from the occasional short-term promotional items, little on the Hong Kong McDonald’s menu deviates from the company’s standard offering. Even some of the latter-day McDonald’s products, such as McPizza and salads, are not seen in Hong Kong.

McDonald’s developed its unique image among Hong Kong consumers by mass advertising. The magic of McDonald’s among Hong Kong children and teens is incredible; most mothers say that it is their children’s favorite restaurant. Today it is not only a restaurant but a gathering place for birthday parties. McDonald’s not only for its hamburger but for the total "McDonald’s experience". That experience is simplicity, quality, service, cleanliness, and value.

To attract consumers, fast-food restaurants try to establish a clear and unique image of their brand. For instance, KFC is the expert in American-style chicken, and McDonald’s serves the American hamburger. In contrast, Burger King’s difficulty in Hong Kong was its lack of a clear, differentiated image.

Many international fast-food chains have regional offices in Hong Kong to provide services and support to franchisees in the region. Many business people still believe that a wholly owned business is the most efficient. A franchise system needs a sufficient staff and control mechanisms to support it. To control costs, large companies such as McDonald’s and KFC purchase their supplies in bulk directly from the United States.

For the future outlook, the real competition in the industry is not just about price, it is also about the quality of the product and the service. Also, there is now an attempt to develop repeat customers and to introduce new products that are suited to the local palate.

Meanwhile, nutrition is one important trend, it has yet to catch the attention of many international chains in Hong Kong. We expect that the trend toward nutrition and healthful food will have an effect on the Hong Kong fast-food industry as the population becomes more health-conscious.

4. Competitor Analysis

KFC is a fast food restaurant chain based in Louisville, Kentucky. It is known mainly for its fried chicken. The company adopted the abbreviated form of its name in 1991. Three reasons are commonly speculated: de-emphasis of chicken, as the chain was moving to offer other foods; the unhealthy connotations of "fired" or a shorter name that would be considered more appealing to youth. Recently, the company has begun to re-embrace the Kentucky Fried Chicken name, and now uses both "Kentucky Fried Chicken" and "KFC" in advertisements. The Kentucky Fried Chicken name can be seen on some buckets of chicken. As of 2007, KFC.com uses Kentucky Fried Chicken for the logo in the United States.

Burger King is a large international chain of fast food restaurant, predominantly selling burgers, french fries, soft drinks, desserts, and various sandwiches. It is headquartered in unincorporated Miami-Dade Country, Florinda, just outside the city of Miami. Burger King’s distinct assets include the unique Whopper with its one of kind charbroiled taste and the company policy of preparing the hamburger any way that the customer wants it.

One of the major issues for McDonald’s is its competitors. KFC is the first competitor in hamburger fast-food chain in Hong Kong, and Burger King is the second competitor for McDonald’s.

4.1 Product

Product is defined as anything that satisfies a need or want, and the most important element of the marketing mix. It can include goods, services, people, places and ideas, can be positioned based on attributes, benefits offered, usage occasions, users, against or away from competitors, or based on the products class. Products enable a company to differentiate itself from competitors and gain competitive advantage. After all, if we didn't have the product the company would have no basis to exist.

The products sell at McDonald's, KFC and Burger King are almost identical, therefore it is important for each organisation to distinguish the differences between the products to separate themselves from each other. KFC only sells chicken sandwich, chicken and fries. The popular burger is Whopper in Burger King, Whopper sandwich is world renowned for its fire-grilled taste. While McDonald's put more emphasis on the service of their staff and the overall experience not just the physical product.

4.2 Price

Price is defined as the sum of values consumers' exchange for the benefits of having or using a product.

Traditionally the major factor that affected buyer choice was price. Recently non-price factors such as service, guarantees, give-away, loyalty programs and image have had a major influence. Price is a crucial part of the marketing mix as it is the only element that produces revenue; all other elements create costs. The three general approaches to pricing are the cost-based approach (the price is based on reaching a target profit), the value-based approach (where the price is based on the buyer's perception of value) and the competitor-based approach (basing prices on competitors' prices).

McDonald's constantly have "specials" such as the sixteen-dollar meal which competitors find difficult to follow. McDonald's generally use a value-based approach to pricing, looking to give consumers the best value for money. KFC use a more competitor-based approach to pricing. Being a market follower they tend to follow trends McDonald's set when they can afford to.

4.3 Promotion

Promotion can be accomplished using a number of different methods (advertising, publicity and public relations, direct marketing, sales promotion, sponsorship and personal selling). Promotion is used to achieve five objectives: build awareness, differentiate products and organisations from competitors, communicate the benefits of a product, build and maintain the overall image and reputation of an organisation, and persuade customers to buy a product.

McDonald's has one of the best promotion methods of any organisation. They use a number of different methods to maintain high awareness and promote their image, including: advertising (television and newspaper), sponsorship, sales promotion (e.g. Five dollars off for meal), and direct marketing (through birthday clubs). KFC promotion efforts are not quite as ferocious. They tend to just maintain awareness through television advertising. They occasionally use sales promotion to persuade customers to try new products.

4.4 Place

It is said that location is the key to attracting customers. Looking at the location of a company there are a number of factors taken into account. These include: Who is the target market? Are they easily accessible from the location? Is the surrounding population likely to grow or decline? What is the surrounding competition? Place also refers to a company's image in the consumer's mind. The image is built through promotion and price, etc. The interior and exterior design of the store are also factors that help to build this image.

McDonald's and KFC have very similar "place" components. The locations and appearances of the stores would be hard to differentiate without signs telling consumers who they are. McDonald's, however, holds a different place in the consumer's mind. This is due to the image built through promotion (price is fairly similar). McDonald's is seen more as a fun place for children’s birthday party, while KFC is seen more as merely a place to eat.

4.5 People

There are two important aspects to this element: service personnel (those who provide the product and do the selling), and customers (those who purchase the product). "People" is an important component of the fast-food industry as it is a service industry.

Both McDonald's and KFC use their staff to emphasis a "friendly" environment and to promote the "service" element of the product. Staff adopts the ideal that "the customer is always right". People are ultimately part of the product; therefore they must perform to customer expectations. This is an approach that is constant throughout any service industry.

5. SWOT Analysis

This SWOT analysis shows us that although there are numerous threats against the fast-food industry, McDonald’s occupies a relatively strong position in the global marketplace. It shows many strengths that Mc Donald’s employs to keep itself at the top of the fast-food industry. Although there are various weaknesses, these can all be turned around following the McDonald’s Plan to Win. Obviously all fast-food chains are going to have to combat the new consumer health expectations, but we feel that McDonald’s has a strong enough consumer base to grow in the upcoming years.

Strengths

• Brand value is high compared to other fast food chains

• Large market share

• Strongest international presence

• Dedicated and professional employees

• McDonalds Plan to Win focuses on people, products, place, price and promotion

• Food quality

• Strong financial performance

Weaknesses

• Unhealthy food image

• Increase in production cost

• Customer losses due to fierce competition

• Undeveloped system & process

Opportunities

• Low-cost menu to attract different customers

• More opportunity in China

• Diversification of menus that caters the extreme health conscious consumers

• Freebies and discounts

• Vertical integration

• Further expansion globally

Threats

• Increased competition in market, including price wars, product innovation, and growth

• Health conscious consumers demanding better quality, healthier menu items

• All fast-food chains expected to struggle to meet new consumer health expectations

Upon close examination, the strengths of the company such as the brand name value of McDonalds that is already world – renowned is too difficult to beat with the upcoming entrants that is still new in the fast food industry. The more they maintain the competency of their skilled workers; chances are better workforce that allows them to engage business globally. However, one must also keep in mind that customers’ preference change from time to time that buyers usually have no incentive to be loyal. So what if they choose another fast food? Furthermore, switching cost to another fast food or eating out in a local restaurant, pizza parlor, coffee shop etc., is moderately low. Plus, it must be noted that it is rather very unlikely than individuals will be consuming only fast food and nothing else knowing that fast food has not been well regarded by health experts. In order to compensate future losses, there is a need to offer more privileges, discounts freebies that would excite previous and future customers. Another tactic to meet the changing lifestyle of the health conscious consumers is to offer them vegetarian dishes that will satiate their needs by adding more colorful variants in their menus such as more vegetables, tofu food or yogurts. The first Ronald McDonald House in Asia was opened in HK in 1996 to serve and aid families critically ill in hospital that increases their involvement in the community through charity works. It is also a way of advertising. In order to maintain loyalty among their employees they have founded in 1961, Hamburger University as mentioned in their official website, that is committed to providing opportunities for McDonald’s employees to learn and grow throughout their careers, developing its people throughout every level of the organization. The World’s seventh McDonald Hamburger University, Hamburger University Hong Kong, was opened din 2002. These are only a few examples of strategies that have captivated people to continually praise their product even with the presence of strict competition. McDonalds Company must bear in mind that to be aggressive in the competitive fast food industry, it is required that they maintain quality products at a minimum price.

To increase promotion of their product they could change the look of their restaurant with seasonal themes, they could always expand their space to accommodate their customers. Washrooms must always be present in their stores so that, customers would always wash their hands before and after eating. It is also better, if the areas they have put up for McDonalds are easily accessible like educational institutions, hospital or the public market. They could always sponsor concerts by Hong Kong’s most appreciated actors that is for a good cause like it supports charity funds for disabled children, cancer patients, victims of the tsunami or any other calamities.

6. Improvement Plan

The main goal of this report is to provide a comprehensive planning of making McDonald the market leader through their effective and efficient human resource management. Accordingly, the effective management of the human resource management is important in identifying the success of a specific industry. Awareness of management value and the capability to manage the human resources, particularly those employees assigned in the service operations will have a greater impact on making the company sustain their market leadership and competitive advantage.

In this regard, the improvement plan for McDonald will focus on recruitment and retention, training and development, performance improvement and work environment.

6.1 Recruitment and retention

One of the accountabilities of the human resource management department is the recruitment and the retention of highly qualified and skilled employees. This is considered as the primary activity in hiring competent people that would become an asset on the company. In recruiting the right employees, companies like McDonald should consider several factors; these include positive work behaviours, and technical skills.

Staffing or recruiting today has been taken a lot more serious by most management. Gaining and acquiring competent staffs at all levels of the company are more than a matter of training. It can be rooted from effective recruitment and retention programmes. The recruitment and the retention programme for McDonald may include how they filter the job applicants, the recruitment channels to be used and the type of information conveys by the industry to the applicants during the process.

In recruiting a new employee to fill the vacancy, it is important that the company or the Human resource management should be able to set criteria that will serve as guidelines to choose the most suitable employee for the job or position needed. In this manner, the criteria includes tasks to be handled, tools and technological skills, knowledge requirements, skills and abilities required, work activities that can be handled, job training, and educational attainment.

In order to identify the most suitable employee who will be given a chance to become the new employee for a company, there are different methods to be used which will be included in Employee Recruiting Policy to identify the critical activities in the recruitment process and monitor its results. HRM Recruiting Program clearly states the mission and objective of the recruitment process to be done. Specifically, the purpose of such policy is to offer a criterion and standard measure for recruiting new employee.

The first mechanism is to have a psychological exam and aptitude test. This examination is important to know some personal information about the applicants. These examinations are given by HR Psychologists/Staff. Secondly, the next exam will be to test the knowledge of the applicants in terms of management concept and other skills that will show their potentialities of becoming a good and effective employee.

After the applicants have taken have taken the examinations, those who passed will be assessed using the interview method which is handled by HR management. Primary and final interview will be conducted to evaluate further those applicants who have survived the thorough examinations. According to Golhar & Deshpande (1997), most employees are selected by means of one on one interview; however, along with this technique, written examinations and panel interviews are also used for the selection process. The use of multiple selection techniques will help prevent applicant selection errors. The use of application tests in the selection process is perhaps the most effective method that could be used in combination of the interview method. The result of whom to become the new employee will be based on the criteria set by Human resource management of the organization. After all these procedures have been done, the HR management and executives makes the final decision on whether or not the employee will be recruited/hired or not.

 

 

6.2 Training & Development

In enhancing the Human resource management of McDonald, the management should also consider the context of employee training and development. The new and strategic human resource management approach of McDonald should highlight the value of providing regular training and development programmes for the improvement of the technical, technological skills and knowledge of the employees and the crew members.

The training and development initiative should be conducted in the purpose of achieving growth for the employees and the corporate objectives. Accordingly, training and development refers to the acquisition of skills and knowledge that specifically adhere to the technical and intellectual requirements of the company, in this case, McDonald.

Trainings are characterized with learning through practical as well as experiential developments within the bounds of the working environment. At present, training and development programs for professional development offered by business organizations to their employees encompass the aspects of morals and principles, work attitude and behavior, field and technical know-how, and leadership potential. All these should be taken into account by McDonalds based on the requirements of the company in order to foster productive aptitude among qualified workforce in the fast food chain.

Accordingly, the one of the main reasons for employee training includes the need for improving the performance of the employees to adapt to the changing business market. Employee training can be used to develop the skills of employees which adhere to the current needs of the company.

6.3 Performance Improvement

Along with the enumerated duties and responsibilities of the, human resources management of McDonald should be concerned with ensuring the performances of the employees. It is noted that such responsibility highlights the need for the members of the human resource department to achieve a specific level of competence in order to motivate the members of the workforce, provide professional trainings well as cultivate the employees to take into account their performance improvement within the company. In this light, managements are tasked with duties and responsibilities to comply with specific performance standards and policies of the company through the work output of the employees. Most of the time, managers deal with the development of training programs to enhance the productivity of the workforce which in the process highlights the need to evaluate the problems and individual competencies of the employees.

Other studies supported the previous claims by indicating that strategies should be created in order to effectively enhance the performance of the employees. Accordingly, enabling the employees to improve their performance, serve as means to increase the service values of business organizations in the objective to meet the demands of the market. As such, it is important for human resources managers to look into the current as well as the future market needs of the industry in order to develop performance improvement programs that will best suit the needs of the businesses. Moreover, there should be an examination of the most appropriate methods and techniques for performance improvement along with the need to enumerate the priorities and corporate objectives of the company so as to create a balance between the needs of the company and the available improvement programs for the employees.

6.4 Work environment

According to previous studies human resources managers are responsible for implementing specific functions of every individual employee within the company as well as the duties to communicate and supervise their work performances. In order to create effective human resources management strategies, the working conditions of the employees should a place of worthy of displaying knowledge and skills that most appropriately cater to the basic needs of the members of the company as human capitals. The significance of good working condition and environment and the overall quality of work life is characterized with effective employee supervision, convenient workrooms, compensation and incentives and aggressive yet satisfying jobs. Such conditions will enable the employees to work at their best and contribute to the overall success of the business organization. Moreover, pleasing work environments are likewise illustrated with employees who show high self-esteem and confidence when it comes to the quality of their work.

Part of having a good working environment is that the company must consider working environment where employee careers are being developed for self-improvement. In McDonald, the company may also consider having career development as part of their new human resource management approach. The staffs and crews of the company should be given career development programmes to be more motivated and productive. Part of these opportunities given by McDonald is by providing seminars, indoor and outdoor workshops to train their employees to the career they want to pursue within the company.

In this regard, the employees of McDonald may undergo some standardized courses which is suitable and appropriate to their current job position and their future job responsibilities. Each year, the company may give opportunities to the chosen staffs to attend seminar/training to be able to enhance their skills and to improve their leadership abilities and to be able to determine what career would be available for them within McDonald.

McDonald’s management is responsible in providing assistance in three ways; making their employees be aware of their chance of career development; extending the personal network of employees by being part of various activities internal and external to the business environment of McDonald and allowing the employees to participate in the continuing professional development approaches imposed by the company.

7. Implementation

Performance Development Process

McDonald should develop a clear policy of Performance Development Process (PDP). Its goal is to give a structure that will improve the ease with which both the employees and employers operate the process without detracting their flexibility. It can be said that the PDP that will be considered by McDonald should be thoroughly undertaken with commitment from the employees and the management. This should be noted to be able to maximise the contribution that the employees and management make with their job and to successfully meet the goal of McDonald to sustain their market leadership and competitive advantage. In this regard, the management of McDonald will conduct a Performance Development Interview (PDI), annually. This should be done by the regional manager or store manager. In this interview process, all the information about the performance of the employees should be sought including the report of the managers who have handled the employee in the period under review or data from other McDonald staff for whom the employee has provided a service. This review aims on identifying the development needs of the employees to provide quality service among their target market (See Appendix 1).

 

Link with Rewards / Compensation System

In the new human resource management approach of McDonald, the company should also consider the concept of having a comprehensive rewards and compensations system. The employee compensation programme should consider adequate compensation which adheres to the wage policy of the host country. In addition, other benefits should be considered insurance and health aspects of the employees, medical expenses and other benefits to improve their quality of living. On one hand, the new human resource management of McDonald should also include reward system which aims on aligning the employees with organisational strategy by giving incentives for deserving employees to act in the interest of the company and perform in their best all the time. Rewards and recognition go a long way to keeping employees motivated, satisfied, and committed. Management should recognize employees for both their progress toward and achievement of desired performance goals. It should show appreciation for small accomplishment as well as big ones. The recognition must be ongoing to reinforce employees' need to feel that they're doing a good job. Moreover, the best forms of recognition typically have little or no cost. The statement just justify the saying that people become more devoted to work when they feel that their environment likes them and appreciate the things they are doing.

The human resource management approach of McDonald should incorporate all their activities and their strategies with an effective and efficient reward and compensation system to ensure that their employees will be loyal to the company and will provide quality products and services.

Management Review (what do I expect to see after 3 or 6 months)

8.1 Performance Appraisal

McDonald’s management should recognize the hard work and effort of their employee by means of giving those rewards and other benefits. However, the company must also consider having a well-established performance systems or indicators which would evaluate and measure the performance of their employees in terms of quality. After considering and implementing the new Human resource management for McDonald, it is expected that the working behaviour of their employees will be enhanced within 3 to 6 months of employees.

After the implementation of the said changes in the Human resource management of McDonald, the management should be able to regularly appraise and evaluate the performance of the employees to determine any performance gap which could be detrimental to the operations of the company. Upon the completion of this evaluation, performance gaps should be noted to come up with systems which will meet the goals and objectives of the company. Performance appraisals aim on achieving two basic objectives. The evaluation purpose aims on letting the employees know where they stand relative to the performance of their co-workers and the objective of the standards of the company. On the other hand, the development purpose aims on assessing the training knowledge needs of the service crews for both the personal and professional development.

The performance appraisal is a helpful approach to guarantee that employees only adheres to the organizational mission, vision and values of McDonald and to ensure that their performances are always measured to know who among the employees needs improvement and who among needs promotions and career developments.

 

Conclusion

Every member of the company attends to duties and accountabilities which will enable the company to achieve organisational objective and sustain their competitive advantage in the market environment. From the presented discussion about McDonald and the need of having effective Human resource management, it can be said that having an effective and strategic human resource management increases the efficiency and effectiveness of each member of the company and enables them to provide quality services among their target audience.

It can be concluded that the duties of the management of McDonalds must be able to provide Human resource management system that cater to the needs of both the employees and the company. All in all, it can be concluded that the hallmark of successful company lies on the efficiency of the management to manage their employees. Excellent human resource management should be characterised with positive working attitude, optimism and innovative ideas to sustain the competitive advantage of the company. In line with the human resource management, the company must be able to provide motivation approach to fulfill the demands of the work environment.

 

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