Investigating the effectiveness of human resource management Essay

A) Terms of ReferenceOn the first of October 2003, the management department requested a report written examine the effectiveness of humane resource management at McDonalds Restaurants Limited, and how this exertion helps the organisation achieve their strategicalal aims. The report was to be submitted on the 9th declination 2003.B) Executive summaryMcDonalds has assorted handicraft strategies existence introduced all over the adjoining two years. The report investigates how the forgiving Resource wariness (HRM) pattern enables the strategic plans to be achieved.McDonalds ar expanding the number of restaurants in India, while closing selected stores in the UK, plans to change packaging, deco and uniform result affect the enculturation of the organisation. McDonalds be too diversifying, McKids, brand of clothing, and toys. It is the HRM policies that go out ensure a smooth change over. The major(ip) concern is the cultural change HRM must ensure that stave be inv olved in the changes geting them to buy into the plans. The extension plans should run efficiently as completely the policies and legislation should already be in place. The investiture in McKids could prove difficult for HRM, beca enforce they argon dealing with a separate market. The flowing polices in place cover a wide range of issues, which ar sufficient for McDonalds strategic plans.C) IntroductionMcDonalds fast food chain of mountains began in America in 1954, dilateing into a recognised universal establishment. McDonalds now has over 30,000 restaurants serving more than 46 million commonplacewealth each in 121 countries and territories 1.The first British restaurant opened in 1973, expanding to 1,184 restaurants however 80% of McDonalds restaurants atomic number 18 operated by independent rightes2.D) MethodologyThe discip furrow was gathered using textbooks from the library, the Internet, and a student pack from McDonalds Limited.E) Their present and expect strate gyIn order for a beau monde to reach its goals, aims and objectives, a strategic plan should be implemented, allowing the fellowship to establish whom they are, their aims and objectives, approaching position and how they are going to get there. strategical cooking in addition confirms the attainment of their goals.Lynch (2002) says, system can be depict as the identification of the purpose of the organisation and the plans and actions to achieve that purpose3. art object Kenneth Andrews takes that strategic planning is a pattern of decisionswhich represents the unity, coherence and versed dead body of a caller-ups strategic decisions that position a ships company in its environment and to give the firm its identity, its power to mobilise its strengths, and in its likelihood of success 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 obligatory for carrying out those goals5. Although varying, all are concerned with the companys planning, objectives and goals.Strategic planning is organised by top management the plan represents directions the company conveys to take at different times. at that place are quin steps in strategic planning firstly, identify the business and develop a mission teaching, showing the companys boilersuit aims and objectives. This averment is apply to motivate betrothees, customers and opposite interested parties. McDonalds mission statement is McDonalds vision is to be the UKs best quick portion restaurant experience6. Secondly, translate the mission statement into strategic goals thirdly, puddle an action plan to attain those goals. Fourthly, introduce the strategic planning, and finally prize the results to determine whether changes are required.McDonalds mensesly holds the largest market share of restaurants chains, at 7.3%7 the nearest comp etitor is Burger King holding 3%8 of the market. UK sales impart risen dramatically over the last 27 years, and in 2001 sales reached in excess of 1.6 billion9, however harmonize to an flush measuring report pre tax profits dropped by 20% last year10.McDonalds intends introducing somewhat(prenominal) new strategies, over the beside two years. McDonalds, Chief merchandise Officer, outlined a number of strategic world-wide plans for McDonalds they intend to roll out a well-grounded lifestyle programme called Go Active, Make greater use of Ronald McDonald the face of the brand, and introduce global licensing programme called McKids, initially utilize to clothing and Toys11. In a separate interview he reports of legion(predicate) plans universe introduced, A worldwide advertising campaign, launch of global packaging concept, ongoing review of mental faculty educate, new products, and uniforms and the opening of a loyalty scheme, and to become a leader in healthy eating1 2. McDonalds are installing Wi-fi nodes13 in many restaurants, allowing customers access to the Internet. Expansion plans are in addition intended for India, where McDonalds plans to double its outlets over the next three years14F) Its current HRM practicesHRM deals with the adult male aspect of a company, such as recruitment, selection, reproduction, provisions of contracts, cost opportunities, dismissals and redundancy, welfare and health and safety. HRM is responsible for issues affecting employees and their relationship with the company.HRM developed from force play 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 constitute the first welfare worker, in 1896, to ensure the well being of women and children in the workforce and to watch over their behaviour15. Welfare work is hush up an aspect of HRM, although not so necessary inwardly todays society . It is these early approaches of Rowntrees, Cadburys and Robert Owen, which clearly show the development of HRM.HRM is defined as a rational approach to the effective recruitment, retention, and deployment of people inside an organisation, including, when necessary, arrangements for dismissing lag16. in spite of appearance the UK, McDonalds employs 47,735 people17. McDonalds expects the luxuriouslyest standards of quality, service and cleanliness towards the customers from its employees they besides require rung to have a positive attitude towards themselves, customers and other staff members. McDonalds employs local people, and ensures that employees are selected, instruct, promoted and treated on the basis of their skills. Their policy states that McDonalds will pop the question career opportunities, challenging and rewarding work, providing remunerate on performance.There are two levels of recruitment within the company, management and hourly stipendiary staff. McDonalds crack cocaines staff flexible working hours suiting individual preferences. The hourly rate for staff exceeds the national minimum wage, 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, increase the number of women they employ, 43.30%18 of their workforce is female. The company now allows qualifying staff up to eight weeks paid maternity or paternity leave. The company works closely with various disabled organisations, and employs where possible disabled people.The diversity development within the company insures the working environment is free from discrimination and harassment and military control applicants and employees, will not be treated less favourably on the ground of marital status, colour, age, gender, race nationality, ethnic origin or disability.McDonalds believes that formulation is the human foot of their success and vital for improving the business19. Hourly paid staff receive on the melodic line training, supplemented by computer based and other training methods, focusing staff receive training at one and only(a) of the companys six British training centres.McDonalds restaurants work to the standards which fancy those required by legislation20, they also have various policies practical application food quality and nutrition, also working closely with suppliers ensuring animal 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 function a nd contract laws, religion, culture, currency differences, and labour costs throughout these countries. The extension plans for India should not affect the company severely as the operation guidelines and policies already exist. at heart 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 worrys outsiders may 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, trustworthy 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 prepare policies.Due to falling sales there are plans to change the anatomy 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 encounter 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 increase training costs.Some of the stores situated in city centres are installing facilities to allow the customer connection to the Internet. The HRM will have to implant policies to ensure better usage of the Internet and take steps to ensure that inappropriate websites are unavailable.McDonalds has a high ejectover 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 t he theories of strategic HRM.There have been many investigations into the issues surrounding HRM, leading to many theories. jibe to the Harvard imitate, HRM polices need to derive from critical analysis of the demands of the various stakeholders in a business and a number of situational factors21. The belief is that because organisations are have and operated by various people (stakeholders), the managements job is to equilibrium the returns to everyone involved. The Harvard Model is seen as the soft approach to HRM, employees being stakeholders of the company. This model has foursome 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 Cs, Commitment, Competence, Congruence and Cost-effectiveness,22. The Harvard theory is that empl oyees 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 concerns with the approach, how to measure the variables, conflicts between cost-effectiveness and congruence, huge chassis 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 both 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 responsib le 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 organisation 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 alter 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 prescriptive approaches also believe that line managers should accept HRM policies and integrate them into strategic plans, allowing staff to change roles within the organisation.Known as culture, o rganisations 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 reception 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 coordinated this approach, by considering the environment 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 not enough to have HR in line with strategy, and create people will raise their commitment to the company, and provide an advantage over competitors. Although McDonalds do invest in people 66.26%28 are downstairs the age of 20, suggesting the majority of these are temporary, so will not get on 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 conclude that different countries mainly have four different cultures, individualism, power distance, indecision 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 maximise staff)* Create a culture that people wish to work in* Promote training allowing staff progression to higher job opportunities* enlarge wagesBibliographyClass Notes.McDonalds Fact show 2002. (Available from McDonalds)Http//www.mind-advertising.com/sectors/sector_restaurants.htm (Accessed 18/10/2003).Pry nn, 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. selling Magazine, 11 September, p.15.Burns, Stuart I. 9 October 2003. The Internet McDonald, online Available from universal resource locator Http//www.bbc.co.uk/dns/ corporal/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 humans Resource circumspection. second Ed. Addison Wesley Longman, LondonHannagan Tim, 1995, Management Concepts & Practices, pitman Publishing, London.Graham, H T. Bennett R. 1998 charitable Resource Management, 9th ED. Financial Times, Pitman Publishing, London.Cole, G A. 2002. Management surmise and Practice. 5th Ed. Continuum, London.1 McDonalds Fact file away 20022 McDonalds Fact File 20023 Wang, Y. 2003. Human R esource Management Strategies, 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 Resource 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/292 4185.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. Financial 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 Manag ement and Culture, Week 6, (Classnotes) Lampeter University.30 Wang, Y. 2003. Human Resource Management and Culture, Week 6, (Classnotes) Lampeter University.