MM33520

Human Resource Management

Ang Pua Xuan 3157

(1655 words)
 Introduction

This essay will be discussing about the international human resource

management of McDonald's.
McDonald's is an American multinational fast food company established in
1940 by Richard and Maurice McDonald. Their global headquarters is at Chicago,
Illinois in United States. McDonald's operates in 119 countries around the world and
have 40031 of McDonald's restaurants at 2021. However, out of the 40031 of
McDonald's restaurants, 37295 or 93% of the restaurants were franchised
(McDonald's, 2022). McDonald's operates in restaurant or food-service industry. In
more detail, McDonald's operates in fast food industry.
The employee of McDonald's consists of franchise owners, corporate staff and
restaurant crew. In order to establish gender-neutral and inclusive job descriptions,
McDonald's utilized artificial intelligence (AI) tools to assist them. McDonald's builds
technology platforms to widen the amount of applicants they screen. McDonald's
structure their interviews and interview guides strategically to guarantee there are
equity and fair in every part of the selection, interview and offer process. McDonald's
is implanting and promoting diverse applicants slates and interviewer panels.
McDonald's is carrying out their University Talent Attraction plan that is focusing on
assisting job placement from historically black colleges and universities (HBCUs) and
other minority serving institutions (MSIs) via postings of the job vacancy, advertising
campaigns, career fairs and career development seminars (McDonald's, 2022).
McDonald's have their own employment policy and one of the policy they aim to
accomplish is hiring local employees if possible (Business2000,n.d.). However, it is
important to note that most of the McDonald’s restaurants are run by independent
franchisees. These independent franchisees are responsible for establishing their own
employment policies and practices, which includes salary payment and benefits given
to the employees in their restaurants. McDonald’s USA is unable to manipulate or
control the employment matters of their franchisee’s restaurant (McDonald's, 2022).
McDonald’s and participating franchisees are carrying out apprenticeships
program in their communities in order to foster career development. McDonald’s and
participating Franchisees provide education opportunities to their restaurant
employees in 25 countries. McDonald’s opened a Hamburger University and has
grown to 9 campuses around the world. The purpose of building this university is to
provide training and education for company-owned restaurant employees and
Franchisees employees regarding management and leadership skills. In order to
reduce barriers to employment for young people, McDonald’s and its franchisees has
cooperated with local organizations and plans to offer pre-employment training for
the young people. Besides that, McDonald’s and IYF organized the Youth
Opportunity Youth Ambassador Program.
Besides that, McDonald’s set a Global Brand Standards that must be follow by
company-owned and franchised restaurants. These Global Brand Standards includes
avoiding harassment, discrimination and retaliation, avoiding workplace violence,
feedback from employee of restaurant every year and ensure health and safety of
employees (McDonald's, 2022).
McDonald’s introduced their Global Pay Principles in 2019. It stated that in
order to attract and motivate talent, pay chances are aligned with the external value of
a job. Besides that, McDonald’s will regularly review the competitiveness of their pay
rates compare to their competitors. McDonald’s make sure that every employees are
compensated at a standard equivalent with their position, duty, place, experience,
knowledge, skills and performance, disregarding their sex, ethnicity or any other
protected personal characteristics. McDonald’s ensure that the pay programs are
communicated constantly and transparently with compelling perspicuity. McDonald’s
make sure that employees knows what decided their pay. McDonald’s respect and
follow every legal and regulatory requirements or standards when designing their pay
plans. McDonald’s yearly pay gap evaluation assists them to make sure that
McDonald’s are sticking to their pay principles worldwide, and determine any pay
gaps based on gender and ethnicity (McDonald's, 2022).
McDonald’s has their own performance appraisal system for their employees
(Md Abdul Hai.,2012). Assessment of the performance of employees is carrying out
constantly every six months after the first three months at the beginning (Adel
R.,2004).

Background Literature

International human resource management can be defined as the process of

staffing, training and development, compensation and benefits, and performance
management in international company (Armstrong, M.,2006).
 Recruitment is the process of searching employees for the job vacancies and
encourage people to apply for the job. Selection is the process of collecting and
analysing the information to assess and decide which candidates to hire in particular
jobs (S Tamer Cavusgil. et al,2016). There are three main approaches for recruitment
which are Geocentric, Ethnocentric and Polycentric (Briscoe, D.,2009). Geocentric is
the recruitment approach that the parent organization employ an employee based on
the suitability of the job vacancy, ignoring their nationalities (Cherunilam, 2020).
Ethnocentric approach means that the parent company will expatriate the employee
from headquarters to all the subsidiaries around the world. By adopting this approach,
the company will only focus on employing the right employee for the right
position(James, Baruti, 2021). Polycentric approach is a recruitment approach where
the parent company will employ local staff for its subsidiaries or affiliates in different
countries (Cherunilam, 2020).
There are few aspects that need to consider during the selection process. The
first aspect is analysis of job requirement such as technical requirements, the tasks for
the employee and others. The second aspect is analysis of the country of assignment
which means the company need to evaluate the political situation, standard of living,
environment and culture of that particular country. The third aspect is evaluation of
candidate on their capability, personal characteristics, desire for the job, family
situation, gender, language skill, working experiences and adaptability. Besides that,
the selection process can be conducted through interviews, formal assessment,
committee decision, self-selection and recommendations from senior executives or
line managers (Briscoe, D.,2009).
Training and development is the process of teaching and coaching specific
technical abilities and knowledge to an employee. Any training and development
programme is required to enable the employees to obtain skills, knowledge and
opportunity to promote to a higher position. Basically, it consists of skills, education
and development. It is significant to teach the employees on the skills that they need
to carry out their job. The aim of education is to pass on the theoretical concepts to the
employees which may help them to grow their sense of reasoning and judgement.
Development is fewer skill-oriented but emphasizes on knowledge. This is because
knowledge regarding business circumstances, philosophy and skills of management,
human relations and analysis of particular industry is more beneficial for better
management of an organization (Aswathappa K.,2013). Besides that, in order to help
the employee to work easier in different country, the company may provide training
programme regarding language learning, study on intensive area, local customs and
etiquette, adaptation to new lifestyle, intercultural business skills, for the employees
(Dowling, P., et al.,2017).
Compensation refers to the pay given by employers to their employees for the
effort they contributed. The pay includes fixed and variable pay according to the
performance of the employees. (Calvin M.,2017). There are few options for a
international compensation can be carry out by the multinational company. The first
option is the utilize of a headquarters scale which means the standard of wages are set
up at headquarters with distinct for each affiliate or subsidiary based on their different
costs of living. The next option is give the salary based on the local geography which
means the employee will be paid based on their country norm. The third option is to
decide a global base of salary per position for every employee around the world. Thus,
this shows a form of equal pay for equal work on a global grounds (Briscoe, D.,2009).
Benefits refers to the non-monetary rewards such as health care, insurance,
retirement program or pensions, leave, vacations and holidays (Adibah A. et al,2019).
It is significant to note that global benefits must be localized to the specific country of
the business. This is because the government policy for each country is different.
Some benefits that are given by the employer to their employee in a country may be
given or mandated by the government. For example, a few countries have fixed
benefit plans for retirement, while some other countries have their own fixed
contribution plans and some countries may not have any retirement plans at all.
Multinational companies ought to establish both qualitative equality and quantitative
equality in terms of benefits. Qualitative equality is a promise to provide something
from each core classification of benefit to every employee globally. It includes core
benefits which means the company will provide basic benefit that are available to all
employees around the world like certain degree of health care. Next, the multinational
company can provide required benefits which is the compensation project or non-
monetary benefit demanded by the local government policy. Besides that, the
company can give recommended benefits which is a less crucial benefit such as life
insurance if the cost considerations allow. Moreover, the company may provide
optional benefits, a non-crucial compensation program which includes support on
transportation, food and others (Briscoe, D.,2009).
 Performance management is the process of enabling the multinational
company to assess and improve the performance of the individual, subsidiary and
company through pre-set goals and objectives that is clearly defined. It is very
important to know that a company’s performance appraisal system is able to affect the
performance of its employees (Aswathappa K.,2013).
In order to carry out an effective global performance management, a
multinational company must look for the right balance between standardization which
aim for control, easier to manage, and ensure the employee worldwide fluidity, and
localization which aim to fit with the culture of local country. Therefore, there are
three phases that can be utilize by the multinational company. The first phase is
design which includes the purpose of performance management, the standard for
performance, the way and tool used to assess, the time to assess, and identification of
the rater. The second phase is implementation which includes expectations to the
performance of the job or position, frame of reference training, feedback on the
performance of the employee and the cognitive processes that impact on performance
appraisal such as motivation, self-efficacy, affective regard, rater(s)–ratee context.
The third phase is evaluation which includes fairness, outcomes of the performance
and rewards (Briscoe, D.,2009).
Company Analysis

There are some issues faced by McDonald’s regarding their international

human resource management.
One of the issue is the difference of culture and local government policy in
different country. It is difficult, and high cost and time consuming for the McDonald’s
to know all different culture and local government policy and establish new strategy
that is suitable for each country. Besides that, there are a lot of factor to be considered
when McDonald’s is carrying out their human resourced audits and training on a
global scale which is a lot complex compare to domestic execution as McDonald’s
have their usual standard of practice that they are familiar with (Mujtaba, B. G., &
Patel, B.,2017).
For the staffing process of McDonald’s, it can be found that McDonald’s is
adopting Polycentric approach as they are hiring local employees in each countries.
This approach is suitable for McDonald’s because there are different culture and
government policies in every country. By hiring the local employees, these local
employees are able to amend the company strategy and policy according to the local
policy and culture. One of the good example is McDonald’s in Malaysia. This is
because Malaysia is a country whose most professed religion is Islam. Therefore, in
order to accommodate to the policy and culture in Malaysia, McDonald’s in Malaysia
have to apply for the certification of Halal and make sure that every product they sell
are 100% Halal which means pork product are not allowed to sell (McDonald's, 2022).
The next issue is the abuse of power by the franchisee. It is very significant to
note that McDonald’s will not interfere with the employment policy of the franchisee.
Therefore, due to the power owned by the franchisee, some practices of franchisee
may cause the employee suffer. For example, McDonald’s have allegation of lower
paid for their lower level of employees. Even though the standard of salary was set by
the franchisee and McDonald’s have no control on it, but the low paid salary given to
the employees by their franchisees may damage its reputation and even worse
McDonald’s may be held accountable for the unfair employment conditions in their
franchisee outlets (Claire Z.,2014).

Recommendations

There are some recommendations available for McDonald’s to improve their

international human resource management.
 McDonald's should promote reflective practice. It should not penalize failure in
order to promote innovations in the organization. Besides that, McDonald's may
praise and award the best performance of employees through a formal recognition
celebration or during a meeting with every staff. Therefore, the employees will be
willingly to take risks as they are not worry to fail and will work harder to reach
the goal (Kristen S., 2011).
 McDonald's can promote local innovation and create a learning ability in the
company. For example, McDonald's may establish an online forum for the
sharing of knowledge to promote learning and innovation. In that case, every staff
in McDonald's is able to give their opinions, views and solutions to the issues in
this forum. Moreover, this may lower down the redundancy of the employees in
the company as every employee is able to contribute to the company by sharing
their knowledge and ideas, no matter it is adopted by the company or not (Kristen
S., 2011).
 In order to promote diversity, McDonald's can establish a forum for every
employees in different countries to communicate. This may allow the employees
to make new friends from different country and culture. Every employees is able
to learn new knowledge and culture and may be benefit for themselves. This is
because they are able to work and adapt in a new environment that have different
culture. Besides that, this may also increase the sense of belonging of the
employees to the company as they may feel like they are one family between
each other.
 McDonald's can increase the degree of control and supervise on their franchisee.
This is because the lack of control of supervise and control on their franchisee
may lead to the abuse of power by the franchisee and may damage the reputation
and image of McDonald's. For example, McDonald's can set the employee work
related policies to prevent the franchisee from overtime abuse to the employees.
Besides that, McDonald’s can establish a new system to monitor the check in and
check out process of the employees at its franchise companies.
 In order to attract more talent, McDonald's can advertise more on social media
such as Youtube, Facebook, Instagram, Twitter and others to promote the
working environment in McDonald's and the benefits that employees can get.
Besides that, McDonald's can conduct different CSR activities in different
countries such as charity work, campaign for disabled people or senior citizen and
others to improve the reputation and image of the company. By conducting
different CSR activities, employees of McDonald's may feel proud and be more
motivated as they are fulfilling their esteem needs according to the theory of
Maslow’s hierarchy of needs.
 McDonald's must make sure that every employees must have equal pay and
benefits no matter which countries is it. For example, there are different currency
rate, standard of living and country policy in different countries. Therefore,
McDonald's can try to minimize the difference of pay and benefits and find the
most suitable pay and benefits for the employees of each country. This may
prevent the employees from feeling unfair regarding their pay and benefit and
become demotivated. Besides that, this may also increase the reputation of the
company and attract more talents.

Conclusion
 In conclusion, McDonald’s is not doing so bad in their international human
resource management but it needs to improve and do it better. This will allow
McDonald’s to improve their reputation and image as a multinational company and
will attract more talents to work for the company. Besides that, it may also reduce the
rate of turnover.
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Appendix A
The rating scale of performance appraisal

The diagram above shows a sample of the rating scale of performance appraisal
(Werther, W. B., & Davis, K.,1996)
Appendix B
The performance appraisal of McDonald’s

The diagram above shows the distribution of appraisers by criteria for performance
appraisal effectiveness and its comparison with the reality in McDonald’s (Md Abdul
Hai.,2012).

The diagram above shows differentiating ability of the crew members between good
and poor performance (Md Abdul Hai.,2012).
The diagram above shows distribution of the crew members by their response to some
job related outcomes and relevant satisfaction level (Md Abdul Hai.,2012).