Mcd_Pon

Introduction:- McDonalds is the world’s largest chain of fast food restaurants primarily selling burgers, French fries and cold drinks. The company has more than 30000 restaurants in 119 countries. Serving nearly 47 million customers daily. They have more than 1 million employees. McDonald’s primarily sells hamburgers, cheeseburgers, chicken products, French fries, breakfast items, soft drinks, milkshakes and desserts. The UK business model is different, in that fewer than 30% of restaurants are franchised, with the majority under the ownership of the company. McDonald's trains its franchisees and others at Hamburger University in Oak Brook, Illinois. In other countries McDonald's restaurants are operated by joint ventures of McDonald's Corporation and other, local entities or governments. According to Fast Food Nation by Eric Schlosser (2001), nearly one in eight workers in the U.S. have at some time been employed by McDonald's. (According to news piece on Fox News this figure is one in ten). The book also states that McDonald's is the largest private operator of playgrounds in the U.S., as well as the single largest purchaser of beef, pork, potatoes, and apples. (McDonalds Website, 2008) Issues:- 1) High employee turnover Aim:- To find out the reasons of high employee turnover and give suggestions to solve the problem Methodology Ethnography Participant observation Sources of data Personal experiences Websites Summary I decided to choose this organization because I am working part time in McDonalds. The biggest problem which I have observed while working here is very high employee turnover in the organization. This report has tried to find out the reasons of high employee turnover in McDonalds and give solutions for the problem. In this report I am going to analysis the culture of McDonalds and their recruitment and training and reward system. Employee turnover “The ratio of the number of workers that had to be replaced in a given time period to the average number of workers” (Word net Website, 2008) Employee turnover can be voluntary and unvoluntary. Voluntary is initiated by the employee and unvoluntary by organization. Unvoluntary means employee terminated because of their poor performance. Skilled vs. unskilled employees Unskilled positions often have high turnover, and employees can generally be replaced without the organisation or business incurring any loss of performance. The ease of replacing these employees provides little incentive to employers to offer generous employment contracts: conversely, contracts may strongly favour the employer and lead to increased turnover as employees seek, and eventually find, more favourable employment. However, high turnover rates of skilled professionals can pose as a risk to the business or organisation, due to the intellectual property (such as skills, training, and knowledge) lost. Notably, given the natural specialisation of skilled professionals, these employees are likely to be re-employed within the same industry by a competitor. Therefore, turnover of these individuals incurs both replacement costs to the organisation, as well as resulting in a competitive disadvantage to the business. [Ruby, A. M. (2002).]  Voluntary vs. involuntary turnover Practitioners can differentiate between instances of voluntary turnover, initiated at the choice of the employee, and those involuntary instances where the employee has no choice in their termination (such as long term sickness, death, moving overseas or employer-initiated termination). Typically, the characteristics of employees who engage in involuntary turnover are no different from job stayers. However, voluntary turnover can be predicted (and in turn, controlled) by the construct of turnover intent. Causes of high or low turnover High turnover often means that employees are unhappy with the work or compensation, but it can also indicate unsafe or unhealthy conditions, or that too few employees give satisfactory performance (due to unrealistic expectations or poor candidate screening). Low turnover indicates that none of the above is true: employees are satisfied, healthy and safe, and their performance is satisfactory to the employer. Many psychological and management theories exist regarding the types of job content which is intrinsically satisfying to employees and which, in turn, should minimise external voluntary turnover. EFFECTS OF EMPLOYEE TURNOVER High turnover can be a serious obstacle to productivity, quality, and profitability at firms of all sizes. For the smallest of companies, a high turnover rate can mean that simply having enough staff to fulfil daily functions is a challenge, even beyond the issue of how well the work is done when staff is available. Turnover is no less a problem for major companies, which often spend millions of dollars a year on turnover-related costs. For service-oriented professions, such as management consulting or account management, high employee turnover can also lead to customer dissatisfaction and turnover, as clients feel little attachment to a revolving contact. Customers are also likely to experience dips in the quality of service each time their representative changes. (Referenceofbusiness Website, 2008) Employment policy of McDonalds McDonald's commitment to equal opportunity extends beyond race, gender, ethnic origin, marital status, colour, nationality or disability, to encompass people with very different backgrounds and experience. (McDonalds Website, 2008) Culture of McDonalds As defined by Ahuja and Shukla (2005) “Cultures is a multi-dimensional perception of the essential attributes or character of an organizational system”. Culture and change: Schneider B (1990) defined culture and change as “Changing an established culture involves the learning of new sets of appropriate. It is more difficult to change an existing culture than to create new culture When international students join McDonalds then take come to work in new environment. It might possible that the culture of their country might be different from countries like US and UK. Here they feel uncomfortable to adjust. For example: In India you will not find youth of age level 16-18 working in McDonalds but here you will find good majority of workers of this age. So when an Indian student of 22-23 years old comes to work here he gets training, instructions and orders from those who are too younger to them. The culture of UK is very open. While working everyone is equal. You are not supposed to give any special respect to your seniors or managers. For example you can call everybody from their first name. This type of culture is totally different than the culture of Asian countries like India and Pakistan where you have to give proper respect to your seniors and elders. That’s why International students feel uncomfortable to adjust. In McDonalds workers just work like a machine. They have to come on specific time regularly perform the same duty and go back on exact time. Rules of McDonalds are very rigid in nature. In the morning manager prepare a schedule for one and who will do what duty today and every worker must do that work only. They can’t get it change at any cost. Even if somebody wants to get his/her duty change they don’t allow and ask the person to work where he has to work. This type of strictness creates problem for the workers specially who are of different countries and don’t feel comfortable in talking and discussing their problems with manager. Another problem is that rules of McDonalds are very rigid in nature. For example for touching every dish they have different colors of tools and even for cleaning areas of outside and inside the till area they have different colors of clothes and equipment. This type of rigid rules make problems for the new worker and it become very difficult to them to adjust. [pic] Allen (1998) (Telecollege Website, 2008) In the above diagram we can see that when the sender sends the message, he/she expects the feedback for it in the sense which the sender interprets but at McDonald’s this communication process is not completed. This is another problem which I realized while working in McDonalds is communication problem between local workers and those who comes from different countries. Everyone there is of different background, different country, different culture and they often have different way of looking, facing and solving the problem or doing work. But due to the rigid rules of McDonalds they are bound to work strictly according to the rules. The communication problem also exists due to language problem. Workers of different countries speaks different languages and that’s it becomes problem in communicating when so many workers of different countries work together at one place. McDonalds is very big organization and they have so many different departments and they keep different people on each department. The problem which I realized in McDonalds that they want every worker to be specialized in each department. For this purpose they keep rotating each worker to departments to departments. This could be problem with those who are permanent employees or it should be done with those who are local workers and expected to work permanently here. But those who are international students or workers which are working part time and on temporary basis it becomes problem for them to be specialized in every department and when they not able to work properly it affects their confidence and they fell embarrassed. One more problem which exists mainly with Indian workers that most of them are vegetarians and according to their religion there are some specific days when they can’t touch non-vegetarian dishes. This becomes huge problem for them when they ask to cook non-vegetarian on those days and that’s why they think to change their job and go to some other sector. Recruitment and selection As defined by Beardwell et al(2004)“The recruitment and selection process is concerned with identifying, attracting and choosing suitable people to meet an organization’s humar resource requirements”. (Page190 humar resources manage. A CONTEMPORARY APPROACH FOURTH EDITION IAN BEARDWELL LEN HOLDEN TIM CLAYDON 2004 PUBLISH: GRAFICAS ESTELLA, SPAIN.) From my experience I can say the biggest problem of McDonalds is in there recruitment and selection procedure. In the interview they hardly ask any question from the candidate. Their interview is just for formality. Even they don’t try to check the confidence, communication skills of the candidate. They don’t take any trial of the candidates before recruiting. They just directly take them as a part of their team. I think this is one of the major reasons why there is high employee turnover in McDonalds. Training As defined by Manpower Services Commission training is “a planned process to modify attitude, knowledge or skill behavior through learning experience to achieve effective performance in an activity or range of activities. Its purpose, in the work situation, is to develop the abilities of the individual and to satisfy the current and future needs of the organization.” Importance of training: • Builds better communications skills. • Develops hidden talent. • Ensures consistent quality. • Provides greater focus. • Produces more effective/productive efforts. • Clarifies the concept of marketing as a business process. In the beginning, a firm should use professionals to train - at least the first time. Choosing the right professional can be difficult and requires systematic review: • Evaluate their experience. • Sit in on a training session. • Verify that they can withstand attack. • ! See if they can look beyond the quick fix. • Confirm that they provide an interactive program. • Check references as to what training survived and how it has been used. (Wjfinstitute Website,2008) In the beginning of every job training is very important for every individual. This is the policy of McDonalds to provide proper training to every new individual. But training should be provided by any experienced and professional. Although McDonalds arrange training for every new worker but it is not given by any professional. They ask any inexperienced or any young worker to give training to a new worker. This type of training might be suitable for any local candidate or for a candidate of the same country but it is not suitable for any candidate of different country. As they are from different cultures and speak different language they need more time to learn and adjust and they need some professional who can teach them with passions. One more drawback which I have noticed in their training (which is also one major reason of high employee turnover in McDonalds) is that they always firstly put new candidate on the front office (Till) for taking orders and collecting money. The international students always face problem in that. During my job six international students joined McDonalds. Out of them five failed and only one able to work properly that’s only because that guy had previous work experience. According to my experience the main reason of this failure is McDonalds serves more than fifty different dishes these international students don’t remember these dishes in one day that’s why they get problem in taking orders in first day. This affects the confidence of the employees. Remuneration “Remuneration is payment for work, which can assume a number of different forms, including a basic wage or salary, supplementary cash payments, such as shift pay and overtime and benefits in kind.” (Herry ed al 2001) Every worker from a staff member to manager joins any organization for getting pay. But this also one of the main reason why they leave organization. “Workers in the fast food industry are paid low wages. McDonald's do not pay overtime rates even when employees work very long hours. Pressure to keep profits high and wage costs low results in understaffing, so staff have to work harder and faster. As a consequence, accidents (particularly burns) are common. The majority of employees are people who have few job options and so are forced to accept this exploitation, and they're compelled to 'smile' too! Not surprisingly staff turnover at McDonald's is high, making it virtually impossible to unionise and fight for a better deal, which suits McDonald's who have always been opposed to Unions.” (Geocities Website, 2008) The pay-rate slab or system of McDonalds is very rigid. It clearly defines the minimum or maximum amount that will be paid to the employees. They have different pay-slab for different age group and they pay strictly according to the age of the worker. For example: different for 16-18 years old, different for 18-21 and lastly for 22 above. But other organizations don’t strictly follow any pay slab and they pay everybody according to 22 above. This is the main cause of high employee turnover in McDonalds as their workers of 18-19 years can easily get job in other organization at better wage. Recommendations 1) This report suggests selection procedure of McDonalds should change. There should be some eligibility criteria for applicants for getting job in McDonalds. Before recruiting anybody McDonalds should take any test or trail of the candidate and only after testing the candidate they should recruit them. 2) This report suggests that the training should be given by professionals especially to international students. The person who is giving training should be calm and patient. The person should understand the requirements and problems of the trainee. 3) One more problem of the employees of McDonalds is their rigid rules and no one is allowed to break that rules. Wherever possible McDonalds should be lenient with their rules where they are not strictly required. 4) The communication process between employees and managers should become better. The manager of McDonalds should create such kind of environment that employees can freely discuss their problems with the manager. 5) I have identified the root of this problem of high turnover of employees is their rigid wage rate system. They are very strict with their pay slab. I would like to give my example that because of this problem even I am leaving McDonalds. When I joined McDonalds that time I was 21 year 340 days old. Only fifteen days were left for me to become 22. But still they told me that I will get according to 21 not 22. After become 22 I asked manager 3-4 times to increase my salary according to 22,I always got same reply ya I will do that, but still I am getting according to 21. Now I got another job and where I am getting according to 22 and that’s why I am leaving the job of McDonalds. That’s why I suggest McDonalds should look again on their system of remuneration and should make their pay slab more flexible and should pay according to the quality of the worker. I think all the suggestions given above will be helpful in solving the high employee turnover of McDonalds. 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