Discuss about the Retaining Talent with Salary Packaging.
In increasingly aggressive employment markets, drawing and preserving talent has been one of the chief apprehensions of organizations. This competition might have eased off in recent years in some countries due to the ongoing financial crisis, but other accessible labor markets remain stiff for some professions. Organizations these days do offer attractive salary packages to retain employees because of tough competition. Employee retention level varies throughout the different industry sectors where certain organizations suffer internally that amplifies key employees turnover (Bradler et al., 2016). Organizations need to be effective with its HRM policies where they continuously need to motivate them to bring the best out of the employees. Employees’ motivational needs might be different though, with some believing in monetary compensation and some in other factors.
For retaining good employees, that generates value for organizations, it is important to recruit them at first place. This method must be given consideration to an organization’s long-term value. The aptitude of achieving competitive improvement through people depends in greater part on the symphony of the workforce. This is the function of who is hired, ways they are developed, and factors leading to what is retained. The main purpose of this essay is to focus on the different recognition schemes of McDonalds’ and the ways it has implemented those to bring the best out of its employees. Salary is a major factor that can retain employees but job satisfaction plays its part too. Employees do want recognition for their hard labor and effort, something that motivates them from their inner self to give in the best shot. Recruiting and retention is the responsibility of a company’s HR department where ‘Right people at Right job’ is essential.
This essay would be an argumentative one where descriptive analysis of various theories would be taken into account associating them with the HRM policies of the company. Every theory’s application in the company is focused on and how McDonald’s has been able to make the best use of it. Secondary source of data have been taken in to understand the company’s various policies and schemes for its employees.
Retention should always begin at the time of recruitment. Companies like McDonalds have been practicing good recruitment policies since years, ensuring a selection process that allows full assessment of interests and abilities of candidates along with values and aspirations (mcdonalds.com.au, 2017). McDonalds Australia is one of the largest and flourishing companies of the country, employing about 75000 people. McDonalds is empowered with a network of operational staff known as internal consultants whose job is to supervise and support its restaurants meeting the criteria. McDonalds is in the habit of recruiting young people who start their professional lives with the company and ascertain protocols that would remain with them forever.
From an organization’s perspective, nurturing talent and authorizing high potentials are important in making the organization’s future safe. McDonald’s restaurants have employee enthusiasm built in their DNA. The restaurants of McDonalds do operate as a separate profit unit; however, employees have shown immense interest in appealing themselves in the teamwork concept and teaming up to make certain their restaurant remains as successful as possible. Each month, employees of top 10% McDonald’s restaurants receive bonus based on the scores of mystery shoppers. Adding to that are the restaurant managers qualified for a quarterly bonus identified based on three equally weighted measures: growth in sales, mystery shoppers and productivity. As per Wilder, Collier & Barnes, (2014), the intact management team is being allied as a team that is to be motivated, rewarded for attaining those metrics. The whole team is confronted to deliver the best possible customer service, as no one knows when the mystery shoppers might hop in.
According to Treuren & Frankish, (2014), considers that keeping recognition schemes fresh and exciting is important in maximizing staff motivation. McDonald initiates new programs and reinvents the obtainable ones to make sure they persist to appeal to employees. One of the highest-profile instances in the last few years have been the fruition of McDonald’s employee of the month system into its Olympic Champion Crew (OCC) proposal, for which it won ‘Most motivational benefits’ at the Employee benefits Awards 2013.
McDonald’s organizational culture supports the positioning goals of the company’s industry. McDonald’s have been influential enough in attracting both customers and qualified employees. An organizational culture of a firm classifies habits, traditions and values affecting behavior of workers. The organizational culture of McDonalds persuades learning and continuous evolution of organization reproduces the effectiveness of the firm in affecting the culture of organization. The organizational culture of McDonalds is characterized through individual learning, organizational learning, diversity and people-centricity. The managers working in McDonalds have always believed that their career opportunities lie with McDonalds and that training that has been very useful in the organization for helping people perform better.
McDonald shapes future leaders from their own systems. About 80 percent of restaurant managers were part of McDonald’s restaurant crew and the company believes that it is important to bring employees through the ranks of an organization implying they have a strong indulgence of the business focus and purpose. McDonald has always believed that investing on people is always necessary as it provides with higher return on investment. McDonald identifies that better-run process, customer service of highest quality and product quality results from spending in people (ArunKumar, 2014). McDonald’s organizational structure is an unique one with five key strategy points like products, people, price, place and promotion. McDonald invests around $40 million in its training process, mainly for people at the frontline crew.
HRM and the organizational goals have been inter related and an important aspect of McDonalds Corporation. McDonalds Corporation has been one of the most famous food chains in the world and a significant part of life of people of all age groups. The American restaurant has been executing a range of techniques and strategies of human resource for providing the required encouragement to employees and teaching them the leadership abilities and methods. It has been observed McDonalds employees display quality leadership as company managers and professionals persuade and stimulate employees. The business managers of McDonalds apply certain theories like Situation Leadership Theory (SLT) and Path-Goal theory in their working style.
Company managers are implementing Situational Leadership theory (SLT) in order to fulfill the necessary requirements of the organizational employees. Through SLT’s implementation, company managers are able to initiate changes and bring in innovation in their recruiting and assortment process and do not force them in following the style of the managers, but implement their own style and work accordingly. This independence that employees get in McDonalds helps them in flourishing and performing better. The company holds on to the principle, “The result is done by man”. According to Allisey et al., (2014), the business environment theory, the employees’ willingness concludes largely, the ways managers execute under precise situations. The human resource managers determine the relationship that exists between environment and enthusiasm of employees, strengthening the leadership skills and self-esteem.
The Path-Goal Theory has been developed in defining the ways leaders motivate and assist employees in achieving the objectives. McDonald’s managers imply the Path-Goal theory in motivating their subordinates and HR executives. According to this theory, employees do follow the behavior of leaders as they recognize it a source of stimulation and job satisfaction. McDonalds Corporation has applied this theory for motivating its employees in order to execute well as it provides opportunities like promotion, paid holidays and incentive for enhancement of satisfaction in job and motivation (Rayton & Yalabik, 2014).
The pay and reward program of McDonalds pursues “pay for performance” philosophy. They believe in bettering the results, which in turn would better the pay opportunities. This program witnesses five categories, which are base pay, long-term incentives, short-term incentives, company car program and recognition program (Yousaf et al., 2014). These five types of pay and rewards lead employees to enjoy benefits and perform better. McDonalds Your Future Program boasts of sharing profit and savings plan, MCDirect shares and other financial planning services that takes care of existing and future financial needs of employees. Motivating employees is never easy with employees often getting bored with their present jobs. According to Mountford, (2013), employees might have different needs under different circumstances and it is hard to fulfill the needs of employees at a single time.
McDonalds offers business functions of twenty-five different types for employees to look for opportunities in jobs like Communications, Environmental Affairs and Product development. The benefits, recognition and compensation programs have been premeditated to magnetize, employ and retain talented people, delivering strong performance and assisting the company in achieving business goals and objectives (Terera & Ngirande, 2014). Four categories have been organized like Your pay and Rewards, Investing in Your future, helping balance your Work and Life and your health and Protection which takes into account most of the employee needs. McDonalds have accomplished Maslow’s second level need hierarchy theory. The company’s recognition programs are designed in a way that identifies and rewards the strong performers. McDonald’s also awards LTI stocks to qualified employees to generate an association between McDonald’s business’ future performance and its rewards for those who are at present in future might grow into a level that can persuade results in the long-term basis.
However, individuals have different thoughts and needs that might not be applicable to others. For example, McDonalds might announce a 30% bonus on over-achievement of sales where employees might be assiduous and work harder to attain the target with some not putting in that extra yard to achieve that is on offer. They might be satisfied with what they get on normal basis.
According to performance to outcome theory, McDonald’s managers have a propensity to reward employees with a base pay along with an incentive pay. This practice in the company is known as Target incentive Plan (TIP) that is in the process of linking performance of employees with the business’ performance supporting the performance of individuals (De Gieter & Hofmans, 2015). McDonald’s focus has always been on expectancies regarding to performance. The aim has always been to motivate and increase the belief among employees that they are competent of performing well. McDonald has always been known for providing the best customer services. In order to attain that objective, the organization needs to offer training for all the employees. Generally the company offers five types of training which are shift management (manager trainees), system management (second assistant managers), restaurant management (first assistant managers), crew development (new hires), and business management (managers of restaurant). Such training procedures have been beneficial for all the employees at all levels in improving themselves and learn things essential for their career progression.
The expectancy theory appears idealistic as few individuals recognize high correlation degree between performance and rewards (Gursoy, Chi & Karadag, 2013). All the employees have different thoughts and attitude towards their job role and some might not be that interested with goals of the organization. Moreover, this theory’s application is limited in the sense that employees reward system is not directly correlated with performance in their organizations. The expectancy theory portrays that performance of employees increase at the time when the company increases its reward and recognition schemes. Monetary benefits takes due care of employee’s extrinsic motivation whereas, intrinsic motivation is all about other job related factors and facts associated with it (Oladapo, 2014).
McDonald’s success rate characteristics depend on three factors, which are consistency, innovation and resiliency. McDonald’s has always believed in offering service, excellence and assessment to its customers for which they have shown immense loyalty. Customers walking into McDonald’s restaurants know what they anticipate and rely on knowledge during time of decision-making. Innovation is a factor that has assisted McDonald’s in its continuous growth (Al Ariss, Cascio & Paauwe, 2014). McDonald’s product offerings have been able to develop along with the changing tastes and preferences of customers. Innovations in menu have permitted the company to embrace product offerings. Lastly, McDonald’s have been able to weather storms and in its path towards global leadership have come across several challenges and dealt them successfully.
Equality is another factor that McDonald’s has always believed in. It has never been the scenario where not all employees have been eligible for its reward and recognition problems. Both the company-owned restaurants and franchisees remain eligible for titles like Restaurant of the Quarter and Restaurant of the Year, earning them a day or night out, sponsored by employer. McDonalds motivation and recognition schemes included service awards, identifying employees’ service at an interval of five years, restaurant of the year, Ray Kroc Award for business managers, champion of the month, eventually feeding into employee of the year scheme and restaurant bonus schemes (McPhail et al., 2015).
McDonald ensures that all the employees understand its core policy, “Recognition of Performance”. This policy needs to be recognized as a necessary configuration by every employee and the personnel management system that needs to be effective in encouraging their motivation (Tornikoski, Suutari & Festing, 2014). Conducting fair and sufficient evaluations is a significant factor in achieving this. An issue that the company desires to face is arriving at estimation of results that are credible to the employees, which is crucial to its growth and expansion.
For non-profit organizations, exposing its existence is an important step towards its effort of recruiting staffs and volunteers. Non-profit organizations rely on two basic avenues for publicizing the work and their staffing needs. Training is important for managements of successful non-profit organization but at times they fail to understand that their training should be in a way that covers all the members within the organization and not only the compensated employees. An organization of McDonald’s stature invests around $40 million for its annual training program, which is not feasible for a non-profit organization. The company under discussion, Spastic Centre can invest only $16,500 in expenses on anything that includes an allowance related to meal entertainment. McDonald have the capability of recruiting candidates that are technically apt and can attract them with high salary packages in order to retain them for years and reap the benefit out of the. Likewise, non-profit firms do compete in recruiting high quality candidates with their private counterparts. In the recent scenario, graduates have started showing interest in organizations having social purpose and accountability along with compensation based on their merit (Li et al., 2014). However, profitable and non-profitable organizations should be managed in the same way. Managing volunteers is parallel to that of paid staffs where their roles should be clearly specified, properly recruited, trained and oriented properly. Spastic Center needs to take into account of managing their approach towards employee benefits, compensation, and policies of personnel and records of employees. Non-profit organizations like Spastic needs to carry out these actions themselves as affording a full or part time help can be an issue.
Successful non-profit organization managers have stated that the need of motivation among employees is even greater in non-profit organizations (Temminck, Mearns & Fruhen, 2015). Even the paid staff of the organization needs accomplishment, service satisfaction, or else they would become hostile at certain point. Spastic Center leaders need to look out for ways through which they can display their paid staff, volunteers and their leadership the ways they can get involved in the company, making a difference. If one is not contributing, there is no need to work in a non-profit organization.
It can be concluded that McDonalds do have recognition program that motivates employees to perform better as for the benefits that are associated with the same. Employees perform better when they are provided with a scenario where they can motivate themselves and others to give their best shot. McDonald has a training process dedicated to improve the skill level of employees and they invest huge money in those training facilities so that their employees attain that required standard desired for customer service. Only if customers are satisfied with the service and quality of McDonald will they come again to experience that at least one more time. Recognition works as a motivational factor not only for employees attaining the same but also others who can take a leaf out of their book and work accordingly. Non-profit organizations have limited financial capability through which it has to manage every activity of its. However, companies like Spastic too have realized that the only way to retain employees is to attract them by offering good salary package. Other fringe benefits like meals, other entertainments and fitness related programs are also attached by non-profit organizations to attract and retain employees.
Reference:
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