McDonald's is a multinational fast food company whose origin and company headquarters are in California, USA. Richard and Maurice McDonald founded the company in 1940 as a hamburger stand from which it has grown over the years into the world's leading restaurant chain by revenue with more than 69 customers frequenting its establishments and having branches in more than 100 countries and 36,900 outlets by the year 2016.BBC report, the company, is the second largest private employer with approximately 1.9 million employees with 1.5 million of these working for the franchises. Having such a large workforce creates unique challenges for the management especially with regards to organizational behaviour. One of the most significant concerns for any organization, especially firms such as McDonald's that have such a large workforce involves improving the levels of productivity and efficiency. Furthermore, it is possible to attain enhanced levels of productivity and efficiency by both the application of strategies and the adoption of advanced technologies and also a highly motivated and enthusiastic workforce. The ability to develop positive motivation among the employees is a critical ingredient achieving more growth in terms of efficiency, production, and productivity. Additionally, motivation plays a critical role in an organization and it exists as a mixture of elements as opposed to employee remuneration only. Poor motivation in an organization out rightly results in decreased efforts, employee output, and low levels of commitment. In the service industry, and specifically the fast food sector where there is cut-throat competition and in which McDonalds operates, the quality of service delivery and customer satisfaction plays a pivotal role in the success of the business. In such a sector, company employees interact directly with the customers.
The Issues Facing the Organization
Before discussing the issues facing the company, the following anecdote showcases the experiences of my best friend (James) who works in McDonald's on a part-time basis. He always complains about the pay in the company and cites that he is always "zombified" whenever he is at work because there is nothing that drives him. He talks of being paid in peanuts while the company expects him to do so much during the short hours in which he works for them. His shifts consist of endless pressure to serve the consumers at a very fast rate. He often has to work overtime to meet the targets that his manager has in place for all of them. The overtime is always unpaid for because the company regards it as part of the targets that the employees have to meet. James often talks about being unable to balance his education and work because he is overworked. His manager is also quite harsh and thinks the customer is always right. There are moments when the customers are unnecessarily rude; which always prompts James to assume an attitude. The manager punishes him without considering the role that the customer played in the incident. James wants to stop working for the company but does not have any other opportunities.
McDonald's faces the problem of an unmotivated workforce. The employees illustrate poor levels of creativity, innovativeness, and enthusiasm towards their jobs. Most of the employees in McDonald's are merely working in the company because they need to have an income. They face economic challenges that make the availability of employment opportunities difficult and thus resort to working in the fast food company that always has vacancies. However, many do not showcase enthusiasm towards working with McDonald's because of low levels of motivation. The situation is concerning when compared to other fast food establishments that have several initiatives to motivate their employees such as flexible working hours, overtime compensation, and a work-life balance.
The causative aspect of employees lacking motivation is the compensation system at McDonald's. Low wages and the subsequent lack of employee satisfaction and morale have a strong correlation that explains the situation in this organization. The low wages lead to poor organizational behaviour that is not in synch with the values, culture, and mission of the company. Talwar (2018) asserts that employee motivation is at the core of the success of the organization. Even though many other factors play a role in whether or not the employees motivated, financial compensation is a chief determinant of this aspect. When the employees are well compensated, they are more motivated to meet the goals and vision of the organization. Unfortunately, McDonald's has not tapped into the compensation as a critical contributor to employee satisfaction. The company pays inadequate wages that in turn contribute to very dismal performances from the employees. The company pays slightly above the minimum wage only because it is compelled by law to do so. However, the compensation is not aligned to the numerous changes in the economy that demand higher wages for individuals to meet their daily expenses. Research indicates that McDonald's is among the companies with the lowest compensation rates in the fast food industry. The salary these employees earn is not sustainable to their needs. The situation promotes many workers to engage in protests that seek better compensation systems from the company. The workers want a minimum wage of $15 an hour together with benefits. However, McDonald's has remained adamant and continues to provide low wages that in turn create an unsatisfied workforce. Jacobs & Padavic (2015) conducted a study that showcased the attitudes of female employees towards the compensation system in McDonald's. According to the results, more than 90% cited that they only worked in the company for the failure of other viable options. Many expressed displeasure with the compensation system. The result was a lack of morale when engaging in different processes that reflect the aspect of organizational behaviour. For instance, one woman in the study said that she could not smile to the customers when the company paid her a meagre salary. Therefore, the effect of the lack of better compensation system on the overall culture of the company is apparent.
Most employees in the company work directly with the consumers. Being a service industry, a majority of the employees communicate with the consumers on a frequent basis. Given the nature of the competition in the service industry, it is apparent customer-service determines how successful an organization will be. The interactions with the consumers influence loyalty and create a competitive edge that facilitates success. Therefore, the employees have to be motivated to interact with the consumers in a way that reflects the values of the organization. The employees at McDonald's may not be able to showcase enthusiasm and pass along the joyful spirit when they are not adequately compensated. The average employee in the company makes $9 an hour. The same employee is expected to work for long shifts, smile at the customers, talk to them, and provide a personalized approach to the company's services. The whole process is exhaustive to a staff that is not well-motivated. The employees will always harbour negative feelings that affect their customer service in the long-run.
The issues plaguing the firm are well documented by industry surveys. One survey, in particular, is that recently conducted by Jobs website Glassdoor (2018). According to the survey, McDonald's ranks poorly and is the last out of the top ten fast food establishments that employees would prefer to work in. The survey was conducted among the employees of the leading fast-food firms. According to the survey, the company ranks particularly low on salaries where it posted a 2.5 score for employee compensation and benefits. The benchmark standards indicate that scores that are below 3.2 are considered poor. Company employees also offered strong criticism the organization's top-level management by awarding a poor score of 2.7. Additionally, the company employees awarded the company a score of 2.9 for its culture, career opportunities, and work-life balance. The table below offers a summary of how the company performed in the survey.
A further review of some of the comments offered by the employees reveals the extent of the issues plaguing the company. One employee is reported saying that there are hardly any rotations with employees working long shifts and meagre pay. Furthermore, the company normally sends employees off when the labour is high. Another study participant highlights that the workplace environment has grease issues, poor hygiene with the management rarely offering quick and effective mediation to the issues brought to them. In its defence, the management appeared appalled and surprised by the findings claiming that the firm invests in the excess of PS43m annually for the purposes of developing its workforce.
Late 2018, employees at two restaurants based in England voted to strike and possibly paving way for the first industrial action against the firm in the United Kingdom. During the incident, workers at the firm's establishments in Crayford and Cambridge voted resoundingly for industrial action citing disparate working conditions together with the use of zero-hour contracts. The representatives of the employees at the Bakers, Food and Allied Workers Union further explained the workers were being paid poorly and with no guarantee for hours. Furthermore, the management had failed to acknowledge the right of the employees to form a union making the issues appear as some form of retribution for joining a union.
The employee challenges facing the firm are further compounded by the high turnovers rates. Although it is widely accepted that the fast food industry is generally characterized by high employee turnovers, McDonald's restaurants seem to experience significantly highly turnovers that could adversely impact on the overall productivity and profitability. The average turnover for the UK outlets stands at 44%. The turnover is, however, relatively higher among the subordinate employees since the managerial turnover is 20%. The high levels of employee turnovers are as a result of various aspects most of which are attributable to low employee morale, poor working conditions, low pay, and long working hours among others. As earlier mentioned, failure to address the employee working conditions and improving their morale will outrightly result in loss of customer satisfaction and market share.
Another issue with working at the organization is the strict deadlines and expected time-frames of completion for each order. The management strives to ensure that the establishment lives up to the name of "fast-food" and hence promises its customers the speedy delivery of each order. As a result, the employees are worked in a speedy manner in ensuring that all orders are delivered on time. As an illustration, an employee is allocated a forty five second time frame to ensure that an order is complete upon being made. Therefore, the employee has to drop the bun, process it and send it as a complete sandwich within the designated time frame. It is rather obvious employees fail to meet the target on various occasions. Such is especially the case when a family shows up and makes different orders simultaneously, with the orders comprising of 22 McChickens, 4 Big Macs, and five Mc Wraps. Additionally, there are employees who are more focused on quality than performing work in a speedy manner. Such employees would prefer to perform their duties in the best manner possible as opposed to working as fast as they possibly could.
A third challenge lies on the mantra held by most business firms an...
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