Issue Identification: Analysis of an Ethical Issue Facing McDonald's

McDonald's is an America fast food company. The company was founded in the 1940s and has grown over the years to become the largest fast food restaurant in the world. Currently, McDonald's operates more than 37,000 restaurants in over 100 countries around the world. Despite being the industry leader, McDonald's is faced with various ethical issues. One of these issues revolves around allegations of paying low wages. Employees are the main stakeholders in this issue. Other stakeholders include worker's unions, governments, and company shareholders. On their part, unions represent the interests of workers and will always fight for fair wages.

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In the United States, the fast food corporation has been sued by groups of employees who allege that the company is systematically stealing from its workers' wages. The allegations against McDonald's highlight a wide range of unlawful compensation practices, which collectively reflect the way in which the company has withheld reasonable pay from workers to enrich shareholders. These practices include not paying workers for all the time worked, docking wages to pay for workers' uniforms and forcing workers to wait for hours during busy periods before they are allowed to start shifts (Wong, 2014). Outside the United States, the company and its franchises have faced similar allegations. In Brazil, South Korea, and Japan, the company has been battling claims of poverty-level pay, wage theft and general mistreatment of workers.

In addition to poor pay, the company has been accused of denying employees the right to join unions. Since 2010, McDonald's employees in several countries have accused the organization of treating them illegally and criminally, especially those in trade unions. In 2012, for example, about 200 McDonalds' employees from New York City went on strike demanding the right to form unions and wage increase (Wong, 2014). This action led to more strikes by the company's employees in at least 150 American cities and about 30 countries. An important consequence of the low pay is that the workers may become less loyal to the company and lose motivation. This issue of poor pay is relevant to the company because it affects the corporation's reputation and ability to compete effectively in the market. Various media outlets have highlighted the issue of McDonalds' compensation, thereby exacerbating negative publicity. This kind of publicity can ruin the company's prospects especially because of the increasing competition in the global market.

As to resolve the issue, the company should review its compensation policy and ensure that employees are paid competitively in line with industry standards. A robust compensation policy will ensure that the company pays its workers in line with the applicable compensation laws. This way, the company will avoid a lawsuit as regards its compensations. As well, a good compensation policy will motivate employees to be more productive and loyal to the company. This will in turn help in boosting the company's public image, which is critical especially in the wake of allegations about mistreatment of workers. Although other practices such as promotions and recognition may motivate employees, compensation is usually critical a factor (Wong, 2014). Workers who can earn higher compensations through promotions and good work will have a strong motivation to continue working. It is therefore imperative for the company to review its compensation programs across all categories of employees including those hired by franchises.

Reference

Wong, J. (2014). You want fries with your poverty wages and exploited McDonald's workers? The Guardian. Retrieved from https://www.theguardian.com/commentisfree/2014/may/15/poverty-wages-exploited-workers-mcdonalds-protest