Investigating the effectiveness of human resource management Essay

A) Terms of ReferenceOn the 1st of October 2003, the instruction department requested a report written investigating the potentness of human resource caution at McDonalds Restaurants Limited, and how this execution helps the organisation achieve their strategic aims. The report was to be submitted on the 9th December 2003.B) Executive summaryMcDonalds has conglomerate profession strategies macrocosm introduced everywhere the next two years. The report investigates how the gentle Resource Management (HRM) act enables the strategic plans to be achieved.McDonalds atomic number 18 expanding the turn of restaurants in India, while closing selected stores in the UK, plans to change packaging, deco and supply will affect the finishing of the organisation. McDonalds argon also diversifying, McKids, brand of clothing, and toys. It is the HRM policies that will picture a fluent change over. The major concern is the cultural change HRM must batten down that rung argon conglome rate in the changes al depleteding them to buy into the plans. The extension plans should run efficiently as all the policies and formula should already be in present. The investment in McKids could prove difficult for HRM, because they are dealing with a separate commercialise. The live polices in place cover a wide range of issues, which are sufficient for McDonalds strategic plans.C) presentationMcDonalds fast food chain began in America in 1954, developing into a prize worldwide establishment. McDonalds now has over 30,000 restaurants serving more than 46 million the great unwashed each in 121 countries and territories 1.The beginning British restaurant opened in 1973, expanding to 1,184 restaurants however 80% of McDonalds restaurants are operated by unaffiliated franchisees2.D) MethodologyThe information was gathered using textbooks from the library, the Internet, and a student pack from McDonalds Limited.E) Their present and anticipated dodgingIn order for a ships b eau monde to reach its goals, aims and objectives, a strategic plan should be implemented, allowing the company to establish whom they are, their aims and objectives, future position and how they are going to get there. Strategic grooming also confirms the attainment of their goals.Lynch (2002) says, Strategy can be described as the identification of the decision of the organisation and the plans and actions to achieve that purpose3. While Kenneth Andrews believes that strategic planning is a pattern of decisionswhich represents the unity, coherence and indispensable consistency of a companys strategic decisions that position a company in its surroundings and to give the firm its identity, its power to mobilise its strengths, and in its likelihood of conquest in the market place4. Alfred D Chandler (1962) states, Strategy is the determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources nece ssary for carrying bulge out those goals5. Although varying, all are concerned with the companys planning, objectives and goals.Strategic planning is organised by top side management the plan represents directions the company unavoidably to take at different times. There are basketball aggroup steps in strategic planning firstly, identify the business and develop a charge statement, video display the companys overall aims and objectives. This statement is used to motivate employees, customers and some other interested parties. McDonalds mission statement is McDonalds vision is to be the UKs best quick service restaurant obtain6. Secondly, translate the mission statement into strategic goals thirdly, create an action plan to attain those goals. Fourthly, introduce the strategic planning, and finally evaluate the results to determine whether changes are required.McDonalds currently holds the largest market share of restaurants chains, at 7.3%7 the nearest competitor is Burger King holding 3%8 of the market. UK sales have risen dramatically over the last 27 years, and in 2001 sales reached in excess of 1.6 billion9, however agree to an Evening Standard report pre tax profits dropped by 20% last year10.McDonalds intends introducing many an(prenominal) new(a) strategies, over the next two years. McDonalds, Chief trade Officer, outlined a number of strategic global plans for McDonalds they intend to roll out a wellnessy lifestyle curriculum called Go Active, Make greater use of Ronald McDonald the face of the brand, and introduce global licensing course called McKids, initially applied to clothing and Toys11. In a separate interview he reports of numerous plans being introduced, A worldwide advertising campaign, launch of global packaging concept, ongoing refresh of stave reproduction, new products, and uniforms and the introduction of a loyalty scheme, and to become a leader in full-blooded eating12. McDonalds are installing Wi-fi nodes13 in many restaurants, allowing customers access to the Internet. refinement plans are also intended for India, where McDonalds plans to double its outlets over the next three years14F) Its current HRM practicesHRM deals with the Human aspect of a company, such as recruitment, selection, provision, provisions of captures, equal opportunities, dismissals and redundancy, welfare and health and safety. HRM is amenable for issues affecting employees and their relationship with the company.HRM developed from personnel management in the 80s. The concept of management practice dates back to the 19th century, when some employers became concerned about employees working conditions. Rowntrees appointed the first welfare worker, in 1896, to ensure the well being of women and children in the workforce and to watch over their deportment15. Welfare work is still an aspect of HRM, although not so necessary within todays society. It is these early hailes of Rowntrees, Cadburys and Robert Owen, which c learly show the development of HRM.HRM is defined as a rational approach to the effective recruitment, retention, and deployment of people within an organisation, including, when necessary, arrangements for dismissing staff16.Within the UK, McDonalds employs 47,735 people17. McDonalds expects the highest standards of quality, service and cleanliness towards the customers from its employees they also require staff to have a positive attitude towards themselves, customers and other staff members. McDonalds employs local people, and ensures that employees are selected, accomplished, promoted and treated on the basis of their skills. Their policy states that McDonalds will provide career opportunities, challenging and rewarding work, providing suffer on performance.There are two levels of recruitment within the company, management and hourly paid staff. McDonalds offers staff whippy working hours suiting individual preferences. The hourly rate for staff exceeds the national minimum w age, salaried management earning between 12000 and 64000. Staff are entitled to various benefits, health care, pension, company car, bonus scheme, sick pay and stock options.McDonalds supports the Opportunity Now Campaign, increasing the number of women they employ, 43.30%18 of their workforce is female. The company now allows offer staff up to eight weeks paid maternity or paternity leave. The company works nearly with various disabled organisations, and employs where possible disabled people.The diversity development within the company insures the working purlieu is free from discrimination and harassment and job applicants and employees, will not be treated less favourably on the grounds of marital status, colour, age, gender, race nationality, ethnic origin or disability.McDonalds believes that training is the foundation of their success and vital for improving the business19. Hourly paid staff receive on the job training, supplemented by computer based and other training me thods, Management staff receive training at ace of the companys six British training centres.McDonalds restaurants work to the standards which meet those required by legislation20, they also have various policies covering food quality and nutrition, also working closely with suppliers ensuring sensual welfare.The company has a number of franchises, which means that although McDonalds controls the majority of establishments, legislations, laws and policies are the responsibility of the franchise operator.G) How the HRM practices enables the business strategies to be achieved.Many policies are in place, covering a wide range of topics enabling HRM to support the company in achieving their overall strategic plans.McDonalds operates in 121 countries, HRM must be aware of the different employment and contract laws, religion, farming, currency differences, and labour be byout these countries. The extension plans for India should not affect the company severely as the operation guidel ines and policies already exist.Within the UK and USA the company has Universities to train their management, and other staff are trained in-house. When they expanded to India, lack of training facilities meant staff were brought in from other countries to employ and train staff. This could have caused problems outsiders whitethorn have little or no knowledge of the country, laws or societal beliefs.As the company expands into new countries they need to consider other issues such as uniform and eating habits, certain religions do not eat certain products, other cultures impose dress code, all these issues need to be considered by the HRM to ensure the placement of correct policies.Due to falling sales there are plans to change the image and culture of the company introducing new decor, uniforms and packaging. Unless HRM have involved the staff in the planning stage of these changes, they will match great difficulty in obtaining cooperation staff need to buy in to changes. Although, the company does have training facilities around the country educating staff on theses changes. Customers may also object to this image change.The introduction of healthy foods may cause problems, staff will need to be re-trained, which may cause staff shortages, and change magnitude training costs.Some of the stores situated in city centres are installing facilities to allow the customer conjunctive to the Internet. The HRM will have to implant policies to ensure correct usage of the Internet and take steps to ensure that inappropriate websites are unavailable.McDonalds has a high turnover of staff, suggesting the recruitment strategy is inefficient. Incorrect job advertisement possibly leads to the submission of applications by the wrong type of person.H) How the HRM practice reflects the theories of strategic HRM.There have been many investigations into the issues surrounding HRM, leading to many theories.According to the Harvard Model, HRM polices need to derive from critica l analysis of the demands of the various stakeholders in a business and a number of situational factors21. The belief is that because organisations are owned and operated by various people (stakeholders), the managements task is to balance the returns to everyone involved. The Harvard Model is seen as the soft approach to HRM, employees being stakeholders of the company. This case has 4 areas to address, human resource flow, reward system, employee influences, and work systems, there are also situational factors such as influence of trade unions, laws, and labour market, which are also relevant to the theory.The theory believes that the effectiveness of the HRM is related to the four-spot Cs, Commitment, Competence, Congruence and Cost-effectiveness,22. The Harvard theory is that employees are an asset rather than a cost, and investment in these employees provides long-term benefits to the company, this theory is similar to McGregors, theory Y approach. There are a number of conc erns with the approach, how to banner the variables, conflicts between cost-effectiveness and congruence, huge variety of variables potentially relevant to any given HRM situation, and sometimes a applied science or set of working conditions make it impossible to increase some levels of Cs23.The alternative approach known as the Michigan model, being the hard approach, believes that employees should be treated like any other resources, obtained cheaply, used sparingly and developed and exploited fully24.There are common features in twain these models, both mix the HR policies and business plan, line managers are responsible for people both are unitarist, and stress commitment to the organisation. McDonalds has a mixture of both the hard and soft approach, store managers being responsible for the day-to-day running as in the soft approach, and training provisions show that staff are an asset and investment in them should provide long-term investment for the company. The organisati on also has similarities to the hard approach, with staff receiving low wages (obtained cheaply), and restaurants are often run with minimum of staff (exploiting).Guests (1987) theory, is also included in McDonalds policy, Guest believes the organisation should, aim for high level of commitment from staff, obtain high quality output, continually improve standards, flexibility from staff, no fixed job definitions, working practices and conditions and seek strategic integration through HR policies25. McDonalds are Continually improving standards and offer flexible working times for staff26. These normative approaches also believe that line managers should accept HRM policies and integrate them into strategic plans, allowing staff to change roles within the organisation.know as culture, organisations have different values, ideas and beliefs that affect the way they operate. According to Handy, there are four types of culture Power, Role, Task and Person. McDonalds culture combines two of these, top management, reflects power culture, making the overall decisions, allowing rapid receipt to decisions. Although there are similarities to the task culture, the overall aim of the organisation is task orientated, focussing on team culture, and strong communication between all levels of staff.The contingency approach suggests that different problems and situations require different solutions27, both internal and external influences should fit together making a logical solution. McDonalds has integrated this approach, by considering the purlieu with their packaging and adjusting menus to suit different cultures. This approach also influences staff promotions that the company offers, staff are offered appraisals, a means of increasing their job opportunities.Barney (1991) suggests that there is a resource based model physical, financial, human and organisational resources are the main link between internal resources and the companys performance. Suggesting that it is no t enough to have HR in line with strategy, and developing people will raise their commitment to the company, and provide an advantage over competitors. Although McDonalds do invest in people 66.26%28 are under the age of 20, suggesting the majority of these are temporary, so will not progress through the company, leaving training costs continually rising.Goulds Model of Morale, should be considered, suggesting that high staff turnover, sickness, absences and low performance within the company, is caused by low staff motivation, job satisfaction and group cohesion. These problem stem from inadequate internal factors such as perception of leaders, matching needs to the job and identification with organisational goals29, and external factors such as status, age, pay, conditions, job market policies, training, equipment and economic state30.Hofstede undertook worldwide research into culture and concluded that different countries mainly have four different cultures, individualism, power distance, uncertainty avoidance, and masculinity. Depending on how the country viewed these areas, Hofstede categorised the countries further, pyramid of people, well-oiled machines, village market and family. As McDonalds operates in 121 countries consideration for this theory may allow a better understanding of the needs and values of staff.I) RecommendationsSuggested improvements* Reducing staff turn over* Encourage long-term employment (minimising training costs maximising staff)* Create a culture that people wish to work in* Promote training allowing staff progression to higher job opportunities* Increase wagesBibliographyClass Notes.McDonalds feature File 2002. (Available from McDonalds)Http//www.mind-advertising.com/sectors/sector_restaurants.htm (Accessed 18/10/2003).Prynn, Jonathan. Evening Standard UK, 3 May 2003.Kleinman, Mark. 2003 Mcdonalds Media gets global review. Marketing Magazine, 11 September, p.1.Kleinman, Mark. 2003 McDonalds gets back on track. Marketing Maga zine, 11 September, p.15.Burns, Stuart I. 9 October 2003. The Internet McDonald, online Available from uniform resource locator Http//www.bbc.co.uk/dns/collective/A1338392 (Accessed 28/10/03).McDonald plans Indian expansion, online Available from URL Http//www.bbc.co.uk/1/hi/business/2924185.stm (Accessed 18/10/2003).Foot, M, Hook, Caroline. 1999. Introducing Human Resource Management. 2nd Ed. Addison Wesley Longman, LondonHannagan Tim, 1995, Management Concepts & Practices, Pitman Publishing, London.Graham, H T. Bennett R. 1998 Human Resource Management, 9th ED. pecuniary Times, Pitman Publishing, London.Cole, G A. 2002. Management Theory and Practice. 5th Ed. Continuum, London.1 McDonalds particular File 20022 McDonalds Fact File 20023 Wang, Y. 2003. Human Resource Management Strategies, calendar week 3, (Classnotes) Lampeter University.4 Foot, M, Hook, Caroline. 1999. Introducing Human Resource Management. 2nd Ed. Addison Wesley Longman, London.5 Wang, Y. 2003. Human Resourc e Management Strategies, Week 3, (Classnotes) Lampeter University.6 McDonalds Fact File 2002.7 Http//www.mind-advertising.com/sectors/sector_restaurants.htm (Accessed 18/10/2003).8 Http//www.mind-advertising.com/sectors/sector_restaurants.htm (Accessed 18/10/2003).9 McDonalds Fact File 2002.10 Prynn, Jonathan. Evening Standard UK, 3 May 2003.11 Kleinman, Mark. 2003 Mcdonalds Media gets global review. Marketing Magazine, 11 September, p.1.12 Kleinman, Mark. 2003 McDonalds gets back on track. Marketing Magazine, 11 September, p.15.13 Burns, Stuart I. 9 October 2003. The Internet McDonald, online Available from URL Http//www.bbc.co.uk/dns/collective/A1338392 (Accessed 28/10/03).14 McDonald plans Indian expansion, online Available from URL Http//www.bbc.co.uk/1/hi/business/2924185.stm (Accessed 18/10/2003).15 Foot, M, Hook, Caroline. 1999. Introducing Human Resource Management. 2nd Ed. Addison Wesley Longman, London16 Cole, G A. 2002. Management Theory and Practice. 5th Ed. Continuum, London.17 McDonlads Fact File 200218 McDonalds Fact File 200219 McDonalds Fact File 200220 McDonalds Fact file 200221 Hannagan Tim, 1995, Management concepts & practices, Pitman Publishing, London.22 Graham, H T. Bennett R. Human Resource Management 1998, 9th ED. monetary Times. Pitman Publishing, London.23 Hannagan Tim, 1995, Management concepts & practices, Pitman Publishing, London.24 Graham, H T. Bennett R. Human Resource Management 1998, 9th ED. Financial Times. Pitman Publishing, London.25 Foot, M, Hook, Caroline. 1999. Introducing Human Resource Management. 2nd Ed. Addison Wesley Longman, London26 McDonalds Fact File 200227 Hannagan Tim, 1995, Management concepts & practices, Pitman Publishing, London.28 McDonalds Fact File 200229 Wang, Y. 2003. Human Resource Management and finish, Week 6, (Classnotes) Lampeter University.30 Wang, Y. 2003. Human Resource Management and Culture, Week 6, (Classnotes) Lampeter University.