People are the most important resource of an organization and they ensure the interaction of financial, industrial, and other resources so that the organization can function. Since 2001 McDonald’s has introduced a series of significant changes to its HR systems. This change is to strengthen the organization’s capability to develop the quantity and quality of leadership talent needed to support its continued global growth and vitality. What is performance management?
1. The processes through which managers ensure that employee’ activities and outputs are matching with the organizations goal (Kramar, 2010). 2. A continuous process of identifying, measuring, and developing the performance of individuals and teams and aligning performance with the strategic goals of the organization (Aguinis, 2007).
McDonalds Managing Performance
Nowadays experienced managers realize that the financial reward cannot continue to be the only kind of an employee encouragement. The employees’ needs should be viewed as an entity that leads to the search of non-financial motives. There exist many non-financial motives that are connected with the employee’s satisfaction of needs, such as his/her recognition, participation in the decision-making, self-fulfillment, personal growth and others. The practice shows that the full use of human resources of an organization is one of the most significant advantages, which allow companies to occupy the leading positions in the world market.
The ‘McDonalds’ company flourishes due to the logical integration of the staff into the problem solving. McDonalds adheres to the principle: ‘The result is done by a man”. ‘McDonalds” examines its employees as the primary source of progress in the field of quality and productivity. This organization has based its success on the motivation theories having altered only some aspects of them. ‘McDonalds’ adheres to four simple principles, which give the possibility to increase the performance of its employees: 1. The organization must elaborate different systems of motivation for every department. 2. The personnel must have clear and attainable aims.
3. The aims must change; managers should have one aim for half of a year. 4. The rise of salary amount must be sensible for an employee. In regards to the four simple principles, for clear and attainable aims, it is better to have one aim per person. For aims to change, (for example) at first a manager examines the number of clients, then he/she examines the number of returning clients; and then he/she should analyze the increase in business sales. This method gives the possibility to find new abilities of employees and to check new methods of work. With respect to the rise of salary amount being sensible for an employee, ‘McDonalds’ organization applies three components of the motivation system: financial encouragement, non-financial encouragement, and social policy. All three factors are described in Maslow’s motivation theory. McDonald’s strategy to develop its global workforce is designed to be aligned with and support the execution of its over-arching strategic business goal, which is “to become everyone’s favorite place and way to eat”.
McDonald’s has an overall “Plan to Win” that provides the global business with a common framework for developing tactics to reach this goal. The framework includes five key elements: 1) People, 2) Place, 3) Product, 4) Promotion, and 5) Price. Informal feedback is frequently administered in organizations on a daily basis between staff (Farr, 2012). It promotes relationship building within the organization, all a part of a constructed performance management system (Shields, 2007). Informal feedback of any kind is only useful when it is precise, and given often. Research has shown that regular feedback can improve staff motivation, job satisfaction and overall performance (Larson, 1984). As McDonald’s has a high involvement culture, (against hierarchy) open communication is encouraged, thus feedback is an essential addition. Frequent feedback is highly beneficial and strongly recommended as the staff tends to be of a younger generation, and as such high turnover is being seen, and frequent feedback will allow managers to constantly be on top of changing staff and behaviors. Feedback can be both positive and constructive to change behavior.
Positive feedback if reinforced will help staff at doing their job right, and that praising behavior that exceeds expectations will result in motivation (Farr, 2010). A performance review is formal feedback between parties, namely employee and manager, pertaining to employee performance (Shields, 2007). Formal performance reviews enhances relationships, an important element of the performance management cycle (Shields, 2007). Formal reviews allow managers to reflect on informal feedback, and development of staff, as well as recognize good behavior and plan to improve under performers (Millet, 1998). At present, formal reviews are being conducted on an annual basis. This is not timely nor frequent, thus ineffective (Millet, 1998). A high involvement culture organization such as McDonald’s would benefit from more frequent formal reviews, as it allows multi party dialogue and sharing of information that creates trust (Fletcher, 2001). If any customer complaints were to come through about a staff member having “attitude” or just casually talking to their friends, a quarterly review will allow management to address the issue while it is still new.
This will allow the staff some ability recall the situation but have the situation addressed before it turns into habit. Managers will be able to implement change to make sure this doesn’t continue, and become embedded in their behavior. Whether you want to tell McDonalds about your restaurant experience, or find out more about the organizations Social Responsibility, you can access and email by logging on to www.mcdonalds.com/us/en/contact_us/restaurant.feedback.html, or call McDonald’s at 1-800-244-6227, 7 days a week, 7:00 a.m. to 7: p.m. CST. Now more than ever, managers need to take great care in preparing performance reviews, documenting decisions and maintaining records. Failing to take the performance management process seriously could create a significant risk of liability for the employer. Here are some steps HR should take to train managers in how to conduct performance reviews and impress upon them the importance of the process. Update job descriptions: Job descriptions are often drafted when an employee is hired. As time passes and roles evolve, so should job descriptions.
Record significant events throughout the year: Many managers see performance evaluations as an annual or semiannual obligation. Unfortunately, our memories are often not as reliable as we think they will be. Managers should document important events throughout the year, including both employee successes and failures. Be consistent: The measures of performance should be consistent across employees in the same or similar roles. If different employees performing basically the same job are evaluated based on different metrics, the performance evaluation will not be useful in justifying why one employee was rewarded over another. Be objective: When managers work closely with people over time, they may find it difficult to put aside personal fondness when evaluating employee performance. It is only human to want to spare the feelings of a friend, but managers who ignore or gloss over performance weaknesses only do themselves and their employees a disservice.
Be specific: A performance evaluation that identifies specific projects and issues is far more effective than one that speaks in generalities. Managers should describe employees’ projects and state what they did that was good or bad. These details will also assist the manager in explaining the basis for decisions in the event of litigation. Identify areas for development and improvement and set goals: For employees to maximize performance, managers must identify the specific areas in which their performance needs to improve and which skills or knowledge bases should be enhanced. It is also important to set goals for such growth and improvement. This will give employees tangible benchmarks and goals and will give managers an objective measure to evaluate future performance. Consider new performance metrics for new business imperatives: Layoff decisions should be based on objective criteria, one of which is performance. Unfortunately, the ordinary performance review, even when conducted in an ideal manner, may not be enough to establish the justification for the selections made in a reduction in force where the business plan is changing.
When a company chooses to change its strategy and shift its focus, the relative value of different employees’ skills and knowledge sets may change. Employers, therefore, must consider whether to create new performance metrics to measure the employee’s ability to meet their future needs, as opposed to just the employees’ past performance. McDonalds has effective motivation system that makes it possible to increase employees performance, and hence the company’s productivity. The situational approach applied by ‘McDonalds’ administration staff has turned out to be the most relevant to the current situation. The administrators have used the specific techniques on the basis of motivation theories. Having applied the procedure of assembly line in food preparation, ‘McDonalds’ has ensured the standard quality of the production and the high performance. Besides, the company has implemented effective motivation strategy that is based on the existing motivation theories.
Consequently, on the basis of the research we can say that every company has its own system of behavior explanation and every concrete case should be examined as the ‘McDonalds’ company case. Motivation theories, such as Maslow’s theory and Self Determination Theory should serve as the basis for elaborating a strategy which will direct manager’s forces towards the aim – employee satisfaction via intrinsic motivation and Maslow’s Hierarchy of Needs model. Since first establishing key performance indicators in 2006, we have continued to refine our approach to gathering and evaluating quantitative measures of our performance. As part of this process, we recently implemented a centralized data gathering system to further ensure the accuracy or the data we are reporting and to make the performance measurement process more efficient for McDonald’s personnel. As a result, we are able to continue expanding the number of markets included in our reporting efforts. In addition, we continue to evaluate options for additional and/or alternative key performance indicators that contribute to our continuous improvement goals and meet the transparency expectations of the stakeholders.
http://www.scribd.com/doc/35052584/Mc-Donalds-Performance-Appraisal http://www.slideshare.net/LanceWhitworth/performance-management-7411989 http://www.streetdirectory.com/travel_guide/184092/human_resources/performanc